You're getting fluid in the carb because you've got an intake valve open somewhere along the line. Nothing out of order with that.
If the fluid is draining down out of all the cylinders, that would suggest stuck but broken rings. It can drain through the gaps in the broken rings, but those rings are still bonded tightly enough to the cylinder walls to bind you up.
ATF works when it has a chance to soak. If it is draining out that quickly, you're not gonna make much progress by pouring more in.
You may have to bite the bullet and at least pull the head for a looksee or (more likely -- sorry!)pull the whole engine and break her loose and clean her up.
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Today's Featured Article - Talk of the Town: Repairin a Gas Tank - by Staff. This interesting discussion is from the Tool Talk Discussion Forum. Remember that safety is your first priority - make sure you know what you are doing before attempting a potentially dangerous activity!
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