VW T3 1.9 WBX Misfire, dies at high revs problem

[voikuvoics]

I have a 1.9 DG WBX from '85 that I got from my grandfather 7 years ago as my first car and I almost always had some kind of trouble with it. Most of it comes as a result of neglect that it had gone trough (sat in a yard for 5-6 years before I got it). I want to change that.

What would be best to check/replace?

I have rebuild the carb, changed the fuel pump, most of the ignition (dizzy cap, rotor arm, spark plugs, coil, ignition module, and so on), radiator, oil, filters and everything that is common sense (break fluid, breaks, etc.) and changed the head gaskets about two years ago.

The problem is that I have black deposits on the sparkplugs and I think it might be running rich + there is oil on the top part of them, where the screw ends. It starts and idles fine but if I rev it I get misfire, and it chokes/wants to die. The auto choke system seems to be working as it opens the flap and closes it with engine temp. I don't think it's a fuel starvation problem. I have changed the lines and have 2 filter on the petrol line from the tank to the carb. But I suspect I have a lot of gunk in the gas tank as my gas filler cap is messed up and I am missing the original cap.

How do you set the mixture of the air/gas ratio? I know where the location of the screw is but I don't know how many turns do you set it to and I think it has been fiddled with by every second mecanic that had laid his hands on it. Everywhere I read it said 2 and 1/2 tights counter clockwise (so towards the end of the car). Is this the right setting?

Could bad timing use excess unburned gas to end up in the oil pan? If not, what could?

The problem appeared while I was driving the van (winter time, about -2 degrees) and I felt the power just drop and could only move the van if I would rev the engine and slowly release the clutch. I had the timing done before by a mechanic that I cannot vouch for as he really didn't seem to be very "professional" (as many of them are where I live). I went there with the same problem, he said he checked the valves and the hydraulic tappets and for some time it seemed to work great before it didn't. 

Something else I've noticed is that my oil level gets higher and it seems like it smells like petrol + is kind of thin. Worn pistons or what problem could cause this? I've noticed oil on the breather pipe before but that problem seems to come and go. At some point it was hardly noticeable, other times it was obvious just by looking at the carb top part or the air filter.

I suspect that it might be one or more of the following problems: 

- dizzy 
-coil (it's a cheap one that I had it replaced with about 3 years ago)
-timing 
-vacum leak(s)
-carburator fuel mixture
-tank full of gunk/filter cap blocked 
-loss of compression? 

What else should I check? could it be possible for this problem to come as a worn engine/worn cylinder head or it's something mentioned above? My first instinct was to change the dizzy but it's quite the money (around 500 euros from a local parts shop- i think they might overcharge tho) so before doing that I was considering starting with the little things. Any tips? 

Thanks a lot for taking the time to read this! 
Have a nice ride!
 

[Aidan]

are all the spark plug tips the same colour ?
have you checked the timing ?
have you checked compression ?
do you have access to a digital timing gun and a exhaust co meter

and where in the world are you ? 

FACTORY SERVICE MANUAL

[silverbullet]

If your oil level goes up and smells of petrol, you may well have a faulty petrol pump (leaking fuel into the engine casing)
Assuming that your "head gasket" replacement was successful and didnt cause coolant to leak into the case.
Have you drained the oil recently?
What mileage do you believe the engine has covered?

[voikuvoics]

are all the spark plug tips the same colour ?
have you checked the timing ?
have you checked compression ?
do you have access to a digital timing gun and a exhaust co meter

and where in the world are you ? 

FACTORY SERVICE MANUAL

Some of them are dark while others are darker but they all have carbon build ups on it. Cylinder 3 seems to also have oil next to the sparkplug.

I have a digital timing gun but no access to a CO reader. I am from Romania, Transylvania. Thanks for taking your time to reply!

[voikuvoics]

If your oil level goes up and smells of petrol, you may well have a faulty petrol pump (leaking fuel into the engine casing)
Assuming that your "head gasket" replacement was successful and didnt cause coolant to leak into the case.
Have you drained the oil recently?
What mileage do you believe the engine has covered?

The van has @250.000 km but hard to know exactly, the odometer is broken since I got it and idk how long before that. I have changed the fuel pump two times and checked the membrane for leaks. The oil was not changed recently as the van sat for some time and I can’t move it to a place where I could do that. It seems like the levels go up when the van is not used.

[silverbullet]

The level will go up a little if the van sits for a long time: the oil in the case oil galleries, crankshaft, hydraulic cam followers and pushrods etc will all drain down.
The hollow pushrods hold a surprising amount of oil!