You're getting fluid in the carb because you've got an intake valve open somewhere along the line. Nothing out of order with that.
If the fluid is draining down out of all the cylinders, that would suggest stuck but broken rings. It can drain through the gaps in the broken rings, but those rings are still bonded tightly enough to the cylinder walls to bind you up.
ATF works when it has a chance to soak. If it is draining out that quickly, you're not gonna make much progress by pouring more in.
You may have to bite the bullet and at least pull the head for a looksee or (more likely -- sorry!)pull the whole engine and break her loose and clean her up.
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Today's Featured Article - The Day Mom Drove the 8N - by Brian Browning. My Dad was wanting to put in a garden but couldn't operate the 8N and handle the old horse drawn plow he had found and rigged up to use with the tractor. Well, he decided to go get Mom out of the house and have her drive the tractor while he walked behind the plow. You got to understand that while my Mom is a hard worker who will always help whenever she can... she had never operated farm machinery before that day. Dad got her out there, explained how the clutch was the same as in our o
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