Starts intermittedly. Have spark, still not start with gas in cylinder.  Removed pull cord cover to replace the rope and oil came out the the starter cord housing. Is there supposed to be oil there with the flywheel, starter, ignition etc.??  Everything in there is covered with oil, could this be my problem??  

could be,

what year is it?

if it is an older year with a 2 cycle engine there shouldn't be oil in the crankcase.

like the polaris trailboss, with a 2 cycle engine if there was any oil in the crankcase then it wouldn't start.
the trailboss was designed to obtain the opil in the crankcase from the 2 cycle engine oil.
yeah it's an odd design.

however, you shouldn't have oil around the starter whether it is a 2 cycle or 4 cycle.

a four cycle engine will have oil in the crankcase though.  

Not sure what year it is.  Looking at for a friend.  It's a 4 stroke.  Went to the dealer to get a new pull cord and they said that there should be about a 1/2 cup of oil in that area for starter drive lubrication.