Case 1845c machines are notorious for water getting into the chain cases. They have poorly designed cover seals ,some have weld voids.,bad axel housing gaskets , and mayby lots of condensation. Some mechanics just leave the chain case drain plugs out alltogether and just oil the chains manually on ocasion. As for as the oil breaking down ,I really dont know what it would break down into. Every time that I have worked on an old neglected piece of equipment the oil is still oily and greasy. When I bought my machine in jan 2013 the chain covers were out of position and partialy open, it had large blocks of ice and some oil mixed with dirt and chicken feathers.Edwin