Re: Johnson 9.5 leaves oil slick in barrel after running
9.5hp motors always run like crap in a barrel because they sit right down there in the smoke. They need fresh, clean air to breathe. Stick your nose down in there and you will understand. However, that explains the surging but doesn't explain why you have to choke it. That strongly suggests a dirty high speed jet (orifice plug). Did you examine it carefully when you had the carburetor apart? Do you even realize it is in there?
Summing up, the barrel is fine for seeing if it will run, but you have to get it on a boat, on the lake, to tell anything about how well it runs. And yes, oily discharge is totally normal. People today just don't understand how it was back then.