When it was running, did it smoke real bad blue smoke? Sounds like you may have worn oil control rings, and scrapers. Measure the cylinder and determine if it needs to be bored. Then order a new oversize piston, or if the piston and cylinder are okay, order new ring set. Keep in mind a 4 stroke uses 5 rings - 2 compression rings, 1 oil control ring, and 2 oil scraper rings. Follow the manual the whole time if you decide to rebuild it. Dont take any short-cuts, and follow the directions. Good luck with what you decide.
THE 80's RAGE! Currently owns:
81, 85 Yamaha Tri Moto 125
83 Yamaha Tri Moto 200 x2
82,83 Yamaha Tri Moto 175 project
85 Yamaha Tri Z 250
84 Kawasaki Tecate 250
84 Honda ATC 70
85 Honda ATC 350X
84 Honda ATC 250R
(2) 84 Honda ATC 200x
82, 83 Honda ATC 185s
81 ATC 200
Lots of other parts and bikes