Brad,,,,Good to hear that the 041G is not siezed!!!! That chain oil in the cylinder may have been a blessing in disguise!!!!!
Bar oil in the cylinder and crankcase on non-gear 041's is a common thing these days.
IT DOES NOT INDICATE A BLOWN CRANKCASE GASKET,,,,not until you rule out the oiler. That's good news for you.
You should not even think of splitting the crankcase at this point in time before you remove the oiler and replace the rubber seal and little o-ring. They deteriorate on saws that are this old, and leak bar oil into the crankcase. When you try to start the saw it locks up tight as a drum,,,,,,just like the symptoms of a siezed piston and cylinder.
The oiler looks to be right next to the oil fill cap on your saw, which is different from regular 041 models. ( the oiler is on the front of them)
Just remove the retainer clip,,,screw one of the regular 5mm screws from the starter into the small threaded hole on the end of the oiler,and pry the oiler out using the screw for leverage. It slips right out no turning necessary. There will be a black rubber seal that sometimes comes out with the oiler assembly, but most often gets left in the housing. There will be two little metal inserts in holes in the seal. Don't lose them. Then tou can pull the plunger out of the body of the oiler and get at the o-ring.
Finding the parts may be trouble. My 041 farm boss is sitting on my work bench right now with exactly the same problem. I live in the middle of nowhere, so getting parts is my problem. If you find a source for the parts, let me know,,,ok?
Hope that helps,,,,again don't split the case until you work on the oiler.
Bob
Additional thought: Bright red colored oil???? That could have come from the gear drive. Do you know for sure if the oil in the cylinder came from the oil tank, or did it come from the gear drive? If it came from the gear drive it may be something pretty simple as a crankshaft seal,,,,just an additional thought.