40:1 is fine. My preference was always 32:1. Sounds like the bike is running rich (fuelwise) though. If you have oil spewing out everywhere, you're probably a little fat in the jetting. Just be careful on who rides it with all that oil built up in the silencer though. A funny story:
We're up north (Michigan) riding at my cabin. I'm sitting on the porch have a water listening to the buzz of a couple buddies riding in the sand pit across the street. We had just gotten back from a 35 mile loop. One of my friends comes back complaining about his bike "bogging when he tries to hit the gas hard".
He says, "take it for a spin, let me know what you think." In my group, I'm the resident fast guy and wrench.
So I say "no problem." Throw my helmet on and take it across the street. A small sandpit with moderately deep sand. It's like the area where you "warm up the chain" before heading out. Anyway, I ride the snot out of it for about 4-5 minutes. I roll back, lean it against a tree saying:
"Dude, this bike rips, not sure what you're talking about." It's right about then that I notice the smell. It seems that his ability does not allow him to really rev the bike and sustain high RPM's for very long because his silencer is practically on fire. Billowing smoke rolling out of the silencer. The oil and carbon that had built up from him putting along (as I call it

) had nearly caught fire after I ran the bejesus out of it. We had a fire extinguisher handy because we really thought it was on fire! Anyway, maybe you had to be there...
Sorry for the long response on the agreement of 40:1!!
