I checked the oil level first. It was where it should be.
If you refering to the breather inside the plate where the oil tube is located, checked that too. It was also clear. Is there another breather located somewhere else?
The motor is only a couple of years old, so I am discounting worn rings.
I do not smell gas in the oil, but I do not have a lot of compression at the spark plug. Your thought of a cracked ring are sounding like a possibility.
If this engine has overhead valves, you may want to check the valve adjustments. Here is a link to the manual for the ohv engines.