Hi Ironbark, you could very well be onto something there. I have never left the same oil in a motor for 7 years and don't know the storage conditions so who knows what could be in there

Normally we see more fuel dilution in smaller engines, but depending on storage and the very infrequent and short runnings, water could very well be a problem. Anytime my genset comes out - usually at least 12x per year (though sometimes thats 4x in one month and then 3 months of nothing) it gets run for at least 1/2-3/4 hour even if it is only needed for 15 minutes. These ones actually spool up to around 5k rpm under high loads so they are no slouch of a motor and need to be run hard occasionally.

You are right about hydraulic oil - it is a glycol base and, like brake fluid, its hygroscopic. will absorb water like anything