We never have a gauling problem as the sprial doesn't keep all the oil from the front end. Many tens of thousands of these have been sold with this design and no complaints. If it wasn't there fuel would spray out the front.
I believe your problem may be the result of one of two things...
1. Fuel may contain less than 18% oil. Check the percentage of oil by volume not weight.
2. You may be missing the thrust washer behind the prop driver. This is there to keep the reward force of an electric starter from gauling the front of the crankcase. See it here
http://www.mecoa.com/kb/56/sportster.pdf