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are you the original owner of this atv?
almost looks like old clear fuel line that dry rotted, but no clue how or why it would be in the oil like you found it!
if it was me, I think this calls for a complete tear down, to have peace of mind , that is if the atv is worth the hassle and costs to you to do so!
that or you can try flushing the motor several times with diesel fuel, Kerosene or the likes and see if anything else comes out, as never know, things get hung up inside motors , which is why JUST flushing a sunk motor doesn;t always work!
only true way to know its safe and clean inside a motor is a full tear down and actually cleaning and inspecting!
anything else is a gamble!
 

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Thank you very much for the reply. the dipstick is metal and we too were thinking bearing separator so doing a gasket kit seems like the safest bet here!!
the safest is a complete tear down top and bottom and making sure all debris is removed from inside the motor
 
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