I went through my 312 two years ago and the only thing I did internally to the motor was measure everything to make sure it was in spec then replaced the seals, gaskets, main case bearings, and she runs like a top. Run good quality oil, change it often, and make sure it's always topped off and you shouldn't have a problem with that motor I also run it WOT all the time even side hill mowing.
That oil looks nasty! How badly did it smell like gasoline?
That oil looks nasty! How badly did it smell like gasoline?