Here we go again. Its acting up worse this time!

I'd check the water in the oil problem first. Is the coolant level going down? If so, you have an internal leak....gasket or crack in head/block. Once you have that figured out, then work on the carb overhaul. I'd check the fuel filter to see if it has any crap in it. If it doesn't have much of anything, just clean out the carb and readjust everything. If there is a bunch of crap in the filter, it's pull the tank time. Make sure the oil is not diluted with gasoline or you'll be needing bearings soon.