340 Duster oil looks milky

In my few experiences with gas in oil, it takes a fair amount of fuel in the oil to smell it. So the 4% could be residual... or the sign of a slow seepage of fuel.

Look down the carb when idling and make sure there is no fuel visibly dribbling down the throats. And then shut it off, and make sure no fuel is dripping down the carb. Check the floats. What carb?

Stock type fuel pumps are pretty cheap.