Here are a a couple pictures of the front of my engine on a 98-99 KE100. I am new to motorcycles and I don't know if this gunk is something leaking out of somewhere it shouldn't be coming out from. and also the pipe going to the engine looks like it could be tighter/closer into that spot.
For more clarification, the pictures are showing the exhaust from the engine.
1.This is from the right side of the bike.

2.This shows a close up of the gunk build up from the left side of the bike.

Thanks for looking guys !!

 

Hmmmmm, I would assume since it like soming out of the exhaust it would be a leaky valve,cracked head into the exhaust, uh yeah. Clean it off real good, check for leaks.

 

Um, yeah, that's too much oil. Make sure your exhaust flange is snug and not cocked in the exhaust opening. Double check the torque settings on the nuts/bolts. On the other hand, it IS a 2 stroke engine, and they WILL put out a bit of oil, but this looks a bit excessive. Is the engine running rich? The exhaust port and pipe tend to "seal themselves" as the engine heats up, so when you have the pipe off the cold engine, it will be (should be) just a weensy bit loose. Are you blowing a lot of blue smoke out the exhaust, too? Might want to lighten up the ratio on your pre-mix. What does your spark plug tell you?

 

(May need a set of rings. Not a bad job to do. Remove the pipe, pull the jug, swap rings, slide jug back down, re-torque head bolts, re-attach pipe.) How many miles are on the engine?

 

This is a learning process for me, so I appreciate any help I can get. Bike has 2400miles. I don't think it was cared for very much though. I was going get some stuff to clean up all the oil first. Then, take off that pipe right? but what is a Jug ? the top part of the engine with the ridges on it? can seals or rings be found at the local motorcycle shop or is it a special order?
No blue smoke..I just got this bike for a trade, so I am not sure how rich is the pre mix.
Also, can anyone tell me if cleaning my carb will help with the poor throttle response, or should I try a new spark plug before taking out the carb.

 

Well today I took some mineral spirits and squirted around to clean up a little. I also checked the spark plug and guess what guys, its good.
Other than that, the exhaust gasket is ok but there is two studs that go into the Jug and one of them is broke off right where the nut should be at on the stud. That is why my exhaust is halfway coming of and leaking. Instead of ordering a new stud I will just go to home depot and get something that fits into the jug and drill an according sized hole for it on the exhaust collar.
Here is a picture of the broken stud.

 

Well if the bike runs good, and does not foul the plugs, just put a new exhaust gasket in it and torque the flange to spec. But if the bike is fouling plugs on a regular basis, you will at a minimum need new rings. Then remove the head and cylinder, and check the bore for excessive wear. If the bore is within tolerance, hone the bore and install new rings, lower cylinder and head gaskets.

Oh never mind, I didn't see your last post!

 

Congrats on the find. that shoulder may be an essential rest for your clamp and proper torquing. I would try and buy the proper stud for the application.

 

Im getting a lot of smoke now..don't know what to do...also What type of gas does this engine like? Under the seat says 91max so i put in some 89octane, is that ok?

 

Ummm, just guessing; this is probably a pre-mix bike (oil and gas), or does it have some kind of "auto-lube" injection like the old triples? What is your oil/gas ratio? (Just making sure you don't run straight gas--with no oil--through a 2-stroker.) Also, if you cleaned the baked-on crud from around the broken stud where it was leaking, it may need to burn-off what you just "re-arranged." I would agree with Drag^, make sure you get the proper stud for several reasons, most importantly being "the right part." Sometimes, the hassle and expense of getting the right part will SAVE you (or your butt) down the road.