I am prepping to work on a FR500 tiller that gets fuel in oil after running a bit.
I cannot find any service manual info out there at all.
I am hoping I will find a float level out of spec or a leaking float, since the tiller has a working fuel shut-off and I dont suspect the bowl is overflowing while parked.
It runs and starts well, does not smoke (havent checked compression yet but suspect it is good)
I was planning on starting with the float specs and compression check, but I need the service info.
Thanks!

I don't believe you have a fuel pump so the fuel must be coming from the carb..
 
Leaving the fuel lever on after pulling the carb off (still assembled), hooked up to the fuel line will
show any leakage coming out of the throttle bore.  There should be none.
 
The float setting in general, with the carb upside down, should be parallel with the carb body. 
 
Another way to check for needle/seat leakage is a by hooking up a Mity vac (or other) brake bleeder / vacuum tool.  It's hooked up to the carb, (dry and off the engine).  With the carb upside down and the tool installed, you should be able to pull AND HOLD A VACUUM.   If it bleeds down, the seat/needle is leaking.  
 
Often, the seat orifice varnishes up causing sticking.  **A quick and easy fix is to use an ear cleaner.
Cut off one end, put some metal cleaner or tooth paste on the fluffy end.  Install in a drill motor and insert into the carb needle bore.  This will remove any and ALL varnish and the needle won't stick. You'll use several ear cleaners as a lot of crap will come out... 
 
If the needle or seat is damaged / worn, the above won't fix that...
 
Plz post back how it goes...

Back home from long work trip, gonna check this tiller today. The engine case has G200-2218552 stamped in it by the way.
The oil definitely smells of fuel, so I will start with checking the carb for overflow, find some new oil, then a compression check if needed. I would love to find the compression specs if possible. Time to get greasy.
 

The Kei Hin BB carb seems in order. jets and passages clean. I left the gas on with the carb loosely mounted and no fuel leaked from carb throat. after cleaning I observed the float valve stopping the flow as soon as it reaches the valve seat (float parallel to bowl seal). 
In my mind the only other way fuel could mix with oil on this tiller would be blow-by from rings??
Is it possible a leaking head gasket could result in fuel oil mix? The engine does have oil leaking from around that height.

A "Leak down test" would give you how healthy the engine is.
 
Any blow by would be heard inside the crankcase and show on the tool. 
 
A blown head gasket will also show on the tool..
 
IE:

Tested compression (with slight head gasket leak) and it seems to be around 40psi.
I don't have a leakdown tester yet, but does this sound like the rings could be worn enough to mix fuel in oil? G200 engine. 
Head gasket coming, but it is difficult to find service manual that details the disassembly needed to replace rings. I see some time-lapse videos online from other countries, but no clear how-to.
They seem to rotate to TDC and then pull camshaft.
Then rotate to BDC and remove con-rod bolts, followed by pulling crankshaft, then push piston out.

I would really like to find detailed info but the service manuals online seem overpriced or sketchy online stuff that may not be helpful.

A blown head gasket, depending on where it's blown, would of course put fumes into the crankcase.. 
 
If your going to re-ring the engine, besides tear down, you'll also have to hone the cylinder for the new rings to wear in to.  A special tool is needed to do this procedure (not expensive).  
 
I'd pull the head first and inspect the cylinder before anything else.  

 The gasket is intact but flatten and very stiff.
Very carbon crusted piston and intake valve. Exhaust valve more white crusted.
Trying to figure how to attach pics
 
 

Still not clear on how the gasket could cause this problem. Seems like rings or valve seats would be the only way into case.
 
Couldn't load pics, got one attached but it would not post the reply. Not sure how to make a URL for the pics.

Decided to put head back on and do another compression test, a baseline one and a second with a bit of oil in plug hole.
However, instead of using the pull start I wrapped a long strap around flywheel and got 5 or 6 revs by pulling it, and the dry cylinder test showed factory spec 80-85 psi this time, so i reckon the rings are decent after all?