Start \ timing

Chances are that the prior owner pretty well stripped the case threads. The gray aspect of the oil is water emulsified in the oil. The two usual causes are a bad water pump seal or condensation in the gearbox. The metallic part is bothersome. Somewhere, something is wearing badly. The site below has two factory service manuals available for free download. One is 2003 the other doesn't say the year. Either should be able to answer recommended oil quantity and oil type. Consider changing filters also. Please rate my answer. Thanks!

Well you solved you own problem you need to replace the return spring.

Hello. Go to any autoparts store and tell them what bike you have. they will cross reference their products and sell you the proper coolant and gear oil. Also, for your future reference, here is a downloadable complete service manual for your bike.
http://www.scribd.com/doc/20356019/1998-03-KTM-125-200SX-EXC-Service-Manual

Happy holidays and best regards, Joe

the kick start mechanism sound like its jamming or the spring has come out take the cover off and inspect the spring if spring looks ok just replace the mechanism get back to me buddy

sounds like a weak fuel air mixture

change engine valve

Pull the slide and move the jet needle clip down 1 or 2 notches.

check the vacuum pipe is in place on carb

how do i check the timing.If it used to start...then very unlikely that timing slipped. Take it you have a good spark! to electrically/dynamically check timing you can use a strobe gun. Or take off flywheel and check position of the stator plate.,

how do i check the timing.If it used to start...then very unlikely that timing slipped. Take it you have a good spark! to electrically/dynamically check timing you can use a strobe gun. Or take off flywheel and check position of the stator plate.,