A lot of oil can get past the valve stem seals, but I don't know if this particular engine has valve seals. On most engines, valve seals can be replaced without pulling the head. If it's not the valve seals, you probably have oil ring problems as others suggest.
Detergent oil normally looks "dirty" in most engines that have much time on them, and doesn't normally mean anything. Like Hugh suggests, I would put in some good detergent oil and change the filter, and then I'd run it good and hard. If that doesn't do the trick, I like the penetrating oil suggestion.
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Today's Featured Article - Product Review: Electronic Ignition - by Staff. Oil, for example has come a long way in the last 50 years and I don't use anything but the latest API grade available. I've heard the arguments for non-detergent oils but would never trade it for today's formulations. Paint is another, the modern acrylic enamels are great for resistance to grease and fuel stains, retaining their shine and they last forever; unlike enamels and lacquers . Still another is the alternator. No doubt using the original generator keeps the tractor pure, but for thos
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