The lines you are looking for are one on top of the flywheel and one on the case that can be seen with the flywheel on.
stihltech, thanks for your patience to hang in there for rapozokurt, Not saying this about you, or rapo, but so many runnability threads go so far, then the OP leaves us hanging on if they ever got the saw running right or the diagnosis.
I am here to learn, and do my best to help others fix their stuff. Cutting my teeth on a brand new at the time 1994, my first saw was an 026. When it began to give me troubles was 20 some years later from it basically becoming an occasional use machine. I was 100% green on diagnosing anything small engine and 2 stroke, despite running push mowers all my life, and a saw owner from age 30 till maybe 45/50 before my saw acted up. All that changed when I found youtube and the web to learn HOW a saw runs, and why they don't when something is wrong.
Much like car repairs, Start simple, use eyes, ears, nose, etc to look for obvious issues. Then use tools such as spark tester, compression testers, Vac and Pressure tester, and of course GOOD SERVICE MANUALS.
As with all Internal Combustion engines, Fuel, Fire and Compression must all be there. In saws, it is vital to have properly sealed parts, and parts that breathe when they are supposed to too. Here is where I learned my most valuable lesson about Saws, Weed Wackers, etc that are basically air pumps that run on gas and fire. If the air part of pump leaks air, it will run lean and it if not repaired, it WILL damage the vital parts that pump and compress air and fuel and give the saw it's power. ( Scored Pistons and Cylinders) Also, as I learned, if the pump is not properly sealed, it will cause issues with the fuel pump system and cause starting and running issues related to the carb/choke/carb H and L adjustments and overall running due to improper fuel delivery. In addition, little things are overlooked or not known to the casual user or even pro, things that Pro Service Techs deal with all the time. Fuel Caps, Fuel Lines, Air and Fuel filters. It wasn't until I saw a video that demonstrated how to test something as simple as the in tank fuel filter, that I saw an explanation of why it is important to have a known " GOOD" filter in the system. Oftentimes, folks don't realize that moisture being present in the fuel or fuel system can cause a degradation of fuel delivery performance from the tank to the carb and in turn cause poor running.
I guess my point here is, not only for the OP and his current flooding issue, but for ANYONE. To learn why our saws work is key to keeping them working right and for a long time. To learn HOW to TEST for and repair a sick saw to a properly running saw is also a key to keeping them running well.
Of the things I loved and always wanted to learn as a kid, repairing mechanical things and electronics, it was never too late to begin to learn these things. I am proud to say that over the past 10 years I have digested and learned the basics of both Tube Amps, HVAC mother board, combustion controls, Car electronics and over the past decade Saws and Weed Wackers. I thank guys like stihltech, pogointhewoods, pioneerguy who make the old tech, resources and also their experiences free and kindly shared to those of us who do not do it for a living but are saw fans/ users who just want to keep our stuff going or fix that that was not so lucky to be well maintained in short or long life spans of use.