I noticed this very thing when my flathead Briggs & Stratton engine was leaking oil from the muffler. Figured I was working on Chevy engines for so long might as well open up the lawnmower and give it an inspection. Pulled the cylinder head off, and immediately noticed that oil was leaking out of the exhaust valve when I turned the engine by hand. First thing I thought of was the exhaust valve seal might be bad. I removed the exhaust valve and immediately noticed that it didn't even have one, only the intake valve has a seal. So then I thought, hmm, maybe the valve guide is worn out, so I knocked out the old valve guide and reamed in a new valve guide, but when I installed the valve/spring and retainer back in oil was still leaking out of the exhaust valve when turned by hand...
Now, through all of this a great deal of oil was leaking out of the engine which of course needed to be replaced. I buttoned everything back up, stood the engine upright, then checked the dipstick to see how much oil was lost. In shock, the dipstick was still full, in fact, the oil was reading over the necessary requirement. Long story short, just as Kenny said in an earlier post, fuel was leaking into the crankcase, which would also explain why the fuel consumption was so great as I was only able to cut a limited amount of grass on just one tank. So, I drained the oil, replaced it with some fresh oil, and rebuilt the carburetor. Problem solved... :thumbsup: