If the guy you got if from was a fool, I'd definitely have the engine checked out BEFORE trying to start it. It he didn't use after run oil of some sort, you may have an engine with bad bearings, scratched up cylinder walls or...........
As far as a prop, IIRC, you can use an 8X6, 9X5 or 9X6. I know my engine has a 9X6 on it and it has plenty of power to pull a 20 sized plane around.