I know this is an old thread but I was doing a search on this topic and found this post and wanted to give my experience.
Back in 2007 when gasoline hit $4.30 a gallon I wanted to see if I could use used motor oil as a gasoline extender. So I used my old Snapper with a 15 hp Kohler engine as a test mule.
Yes the savings was marginal considering it only takes about 2 gallons to mow my 3 acre property but this was just an experiement.
I started out with a 5% mixture. No smoke, ran great.
Then I tried a 10% mixture. No smoke, ran great.
I got up to 20%. At this point the engine still did not smoke but did seem to sound a little louder.
I managed to burn about 1 liter of this mixture then all of a sudden the engine died. The first thing I checked was the spark plug. I was suprised to find that the plug was not fouled whatsoever!
I drained the mixture, pulled the plug out of the fuel bowl and topped off with gas.
Immedietly the engine started and I finished mowing my yard.
What puzzled me was what caused the engine to stall. My guess was the oil separated from the gasoline and when it filled the fuel bowl, the fuel/oil mixture could not ignite.
I've heard that 2 cycle oil/fuel will separate. That's why I usually dump what's in my 2 cycle lawn equiptment back into the jug, shake it up and refill the tanks before using them.
Another mystery was why did the engine not smoke or foul the spark plug at 20%.
My guess is the smoke/plug fouling comes from incomplete combustion. Perhaps with worn rings or valve guides, oil enters the combustion chamber after ignition has already occured and that's where the smoke comes from.
Where as if the gas and oil is mixed, the gas ignites and the oil burns with it so there is no incomplete combustion. Well theoretically speaking. Nobody has yet to build a 100% efficent engine.
I never bothered to try any other experiements with gas/oil but the idea has stuck with me.
One thought might be to agitate the mixture with a fuel pump which recirculates the mixture and keeps the oil suspended in gasoline.
If I can get this to work, then I might try a 30/70 mixture.
The Snapper still runs but has been semi-retired after buying a new Craftsman 46".