The "oil gain" problem is typically caused by one or both of two things...
1. Engine is not broken in well, so fuel leaks around the rings into the oil. It takes about 200 hours of heavy usage to properly break in these big Honda 4-strokes. Run at WOT as much as practical. That is actually good for the engine after initial breakin and up to 200 hours.
2. Thermostat wrong, or stuck open. When engine operates below it's proper operating temperature, fuel leaks by the rings and contaminates gas. If I recall correctly, the 130 operates fairly hot - around 180 degrees F. Your Owners Manual will show you how to test the t-stats.
Smell the oil. If you detect even a wiff of gas smell, change the oil and find the problem.
As for water flow - I'm assuming you are referring to the tell-tale outflow (pisser.) First, make sure the tube running from the block to the indicator is clear using compressed air or a wire as Justintime recommended. If that does not fix the problem, remove the tube and make sure it is clear, then closely inspect the tube connector at the block, and clear it out. It is not unusual for that nipple to become partially clogged. If that does not fix the problem, then you need to drop the lower end, remove the water pump, remove the thermostat, and reverse flush the water passages from the t-stat opening under as much water pressure as you can get.