Milky oil in Briggs & Stratton 5 HP engine?

I just bought a used go cart with the above engine. I pull up and the guy has the go cart running. Just sitting there ideling in his driveway. Well, I get it home and me and father in law cant get the damn thing started. We turned the kill switch to on and on the engine and turned the choke in every position we could. Then we checked the oil, there were 2 caps to add or check the oil. One on the front and one on the backside. It was oozing milky oil. What the hell? How did the guy have it started? How come we can't? What is the solution besides replacing the engine?