Water in oil

Oil is pumped around the engine. If there is water in the oil, that too is pumped around the engine.
If the engine is water cooled, I would remove the head, if it is warped, have it skimmed and then refit with a new gasket.
If it is air cooled, condensation is common. Replace the oil and any filter.

Motor oil turns white/beige when it becomes emulsified with water or coolant. While the presence of emulsion can indicate an internal coolant leak or careless topping up the oil level, the nature of modern anti-pollution positive crankcase breather systems draws cool damp air into the hot engine. Some such systems aren't well designed and are prone to creating "mayonnaise", especially in the cooler, damper months.

If you are referring to the crankcase ventilation, it could be that either the engine is overfilled with oil, or the cylinder could be glazed and the engine requires a moderate to heavy load every so often to prevent this from occurring.

I would recommend that you stick with mineral oil with a grade of 10w/ 30, even better just use the OEM stuff, or Honda 10w/30 is easily available.

Some of these small engines have a chrome bore and do not like synthetic oils, it will cause cylinder glazing and excessive blow by.

Change the oil when it is starting to become contaminated, ie. getting carbon in it, rather than guessing at hours of operation.

If it's not the CCV your referring to, it must be leaking oil from the engine somewhere and blowing back via the cooling fan, this will require a thorough clean and further investigation to diagnose correctly.

Most common areas of oil leaks are the crankshaft seals and valve cover gasket.

I personally would start with an oil change to mineral, and place generator on a loaded circuit for a while, don't kill it just load it, and see if you have any improvements.

Hope you find this helpful.

Hello Ricky, I would check the carburetor needle valve and seat along with the carburetor float. You could get lucky and just need to clean the crud out of the carburetor float bowl.

Moisture builds up after the engine cools down and mixes with oil residue. This is an emulsion of oil and water that is common in areas that have large temperature variations. If you're in a hot climate this should not happen unless you're getting water into the oil. I would change the oil, heat it up completely then change it again while it's at it's hottest. Not fun but comparatively cheaper than a new engine by far. Probably nothing to worry about if you live in large variations of temperature. Wipe it out with carb cleaner & make sure your air filter is clean.

White smoke! If your bike is water cooled it's not good. Check your oil. Just look at the dipstick after a short ride. Is the oil foamy looking? If so water from your cooling system is making its way into the crankcase. Unfortunately this is major.

Contact the manufacturer. The rings are not seating properly and letting air/water bypass into the crankcase.

If it is out of warranty, I would put in a new set of rings and check the cylinder bores for damage.

Yes the exhaust valves can be burnt, however is there any pressure in the crankcase when you do the leakdown test? Ex valves normally cause lack of compression and not oil burning. If rings are worn also then you will see pressure in the crank case

Is there enough oil in the crankcase? Many generator ignition problems come from the oil level sensor. Either not enough oil or the sensor being bad.

When I purchased mine new it came with 1 Quart and I found it to be just a little too much when I filled the crankcase. Check the Oil level stick when adding.