Well----70 PSI is way too low.----Should be around 120 PSI.-----Time to remove a cylinder head for inspection.-----You may not like what you see.----Post pictures when head is off this motor.
The 2 HP lower unit has no plate , yes they used the 2 HP lower unit in 73.-----But there is a kit to convert that simple pump to a more expensive set-up.
Little bit of dish soap in the barrel and issue is gone.----Oil out the exhaust is part of the nature of a 2 stroke engine.-----Some fuel / oil goes right through the motor and is wasted !!!----A much mis-understood concept !