The black sludge is probably residue from castor oil, which the homeade fuel must use. Exhaust residue should be brown, if colored at all. Pure black usually means aluminum residue in it, a bad sign of a too-lean mix or something rubbing in the engine. You can roll the residue between your fingers and feel the particles, or even see them glinting in bright light. Personally, I'd stick with commercially manufactured fuels. They are usually more consistently mixed and have less contaminants. It's hard to improve on the fuels that are commercially available. If your engine is an ABC/ABN type, use fuel with a castor/synthetic oil mix, like Morgan's Omega. If your engine has a lapped iron piston or rings, you should use pure synthetic.

Dr.1