Are you talking about the Merco Rustler.40? If so don't run over 18% oil and 1/4 castor is the max I would use. To much oil gives flame outs and erratic running. I have two of the very early ones and have run them fast at 10,000+rpm with 10/4 props and slow with 11.5x4.5 props at 7500rpm. In the beginning I had erratic runs with 20% oil 50-50. Mine are high mileage motors and they have not lost any power. Some people gave up on them because they ran to much oil. I got rid of the funky needle valve set up. I have run 5% and even 20% nitro and had no problems.
Ted and I ran ours *bone stock* with Powermaster GMA fuel (22% oil) and found them to be dead reliable and repeatable. That includes the needle valve/spraybar. I think Ted just came in 4th at VSC running it that way (with, near as I can tell *no* practice flights since about August). I am sure it doesn't need a lot of oil, but at least reasonable amounts of oil cause no harm.
The one problem that we found was that the muffler tended to heat up the fuel tank, so you need some insulation between it and the tank, or it will go progressively richer throughout the flight sometimes (as the fuel gets hotter and the viscosity drops). I am also less-than-thrilled about the screw-on muffler cantilevered out there, but it has held on both of our engines so far. I have seen a few self-destruct for other people, and I would make sure that it's tight every flight, because if it gets loose it will eat up the threads in short order.
We also noticed that there was no problem with moderate amounts (up to 25%) of nitro, and that it didn't seem to care if you ran 8500 or 10000. The instructions added by the importers had all sorts of warnings about head shims, etc, with nitro but it's absolutely no problem with 15% even at sea level.
I think we were both very happy with the performance, although I haven't actually finished the model I was building for it, we ran both of ours in several of Ted's airplanes.
Brett