Yes environmentally speaking the engine should be fixed ASAP, if his budget permits. I agree with Barrie a rebuilt engine{with warrantee} is probably the best option providing the rest of the car is in reasonable condition. Sounds like at minimium she needs exhaust valve seals. Try one of the high mileage oils as suggested, it may buy some time. The fluffy black soot is from a rich mixture, try cleaning the carburator with a spray type cleaner{available at Canadian Tire for around $6, just follow the instructions on the can} pay particular attention to get the air bleeds in the throttle body, then check the choke for proper operation. I hope this is of help. Carburators on these small engines are really dirt sensitive, a good cleaning may make a world of difference.