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Troy Bilt weed wacker stalls and won't restart?

I have a Troy Bilt TB525CB thats given me many fits, but this one I have yet to figure out. It will run fine for a while, say 10-20 minutes. Then out of the clear blue it will start to run choppy and if it does stall, it's not restarting until it sits several hours. I've pulled the plug right after this happens and it's not flooded. If you can catch it as it starts to run funny, moving the choke to fully closed or nearly fully closed will allow it to remain running although it lacks power when I do this.

Today I decided to run it with the carb cover off to see if I can notice anything. When I took the cover off the air filter was saturated with what seemed like a fuel/water mixture. I started it and it ran fine. After a few minutes I noticed a milky substance spitting
from what I think is a vent tube or breather of some sort. It is a flat cap on the carb mounting housing which a rubber line runs from the engine to it.

First of all is this normal, and if it isn't what could be causing it? Second, could this be tied to the trimmer's problems once it's been running for a while?
Raymond, August 2010