Sounds like you have at least 2 problems. You need a new float valve and your plug is oil fouled from the mystery oil. You should change the valve but may still be able to get it running with what's in there. If it's sputtering I'd put the choke in the off position (up), turn the petcock to the off position since you know the float is full and overflowing, hold the throttle wide open and kick it until the plug fouls, dry or replace the plug and repeat. Eventually the oil will burn out. It should run longer and longer each time.
Of course the correct way is to pull the head and cylinder clean the rings and change the float valve adjust and reassemble. But that takes gaskets and a carb kit and I never do things right the first time anyway. Some of these bikes eventually loose the crankcase seals and suck oil from the transmission or air behind the flywheel, especially if they haven't run for a long time and dry out.
You may want to get it started to ensure it's not sucking air or oil before putting more work, parts or money into it.
Here's a link to the correct puller on ebay.
http://cgi.ebay.com/ebaymotors/ws/eBayI ... gory=35625