Pipe full of oil actually is normal for a bike that has been sitting. Autolube pump check valves often let oil bleed past.

Be careful kicking it over as you might blow out a crank seal as bottom end is likely full of oil too.

Just some oil in pipe shouldn't require a "burn out". If head pipe or silencer end are carboned up, then burning out is an option.

If you think it's really full in the c-case like a full tank of oil has gone in over time, then could get it with piston at tdc or there abouts & insert a tube into the case below the piston on the inlet side & suck as much oil out as you can. then push it around the yard with plug out in second gear. Gonna make a mess but sounds like it already has. Could just push it around as described without sucking oil out & it'll come out plug hole & exhaust port. Then give a kick. I can hear it running from here. Welcome from NZ down under.
By the way, i have a similar one albeit a 'rough runner' but had one new as well back in the day. That's why we're here i guess--love old yamahas.

Greetings from Tennessee. 

Thanks! We are performing a full tear-down and cleaning before even trying to get it started. A bit backwards from what I'm learning now but we want to have it clean and see where the missing parts and/or leaks are. It felt like it has good compression from kicking it over but my son and I really wanted to tear it down to assess.

Great project. Looks pretty complete minus the headlamp and incorrect front fender.
2 strokes are easy to learn as they have a lot less moving parts than a 4 stroker.

Good luck with your DT1B project. Hope you get it going soon! Mine had a high fender too (see avatar pic) and in the trails, who could tell.