I'd figure the biodiesel should be very well washed, if there's any lime left in it, just that and ethanol in the fuel, when there's excess fuel getting past the rings, will do the diesel plant transesterification thing in the crank case with the mineral oil under heat and pressure. Synthetic is already transesterified so should survive it, might use up some of the additives early though. Well prepared biodiesel, you should be able to add a quart in the crankcase and not get any ill effects... unless you count mobilising years of sludge build up and cleaning it out as an ill effect, which is also possibly what happened here.

I think I'm going to take a chance and just mix the filtered veg oil with gas and run it in the 2-stroke. I use to mix caster oil and ethar and run it in my model airplane engines with no I'll effects. What could happen? Theres no oil in a 2-stroke and no valves. Just a piston and some roller bearings and I think the veg oil will give them a very good lubrication. The only thing that I see that could possibly go wrong is that the spark plug might foil up and that U can clean.
The only thing is I won't put it through the auto lube pump cause it might get clogged. I'll rather mix it directly in the gas tank

PS. What is a good method to filter used veg oil?

I think using veg oil as a lube is a BAD idea. Too risky. Risky enough using it in the fuel.

Have you tried the 100:1 premix two stroke oil?
I use platinum tipped plugs in my two stroke engines, on the Yamaha rd350 I used to have I went from changing copper plugs every other tank of gas, to having a set of plugs last an entire summer (10+ tanks of gas), and would only change them because it was spring.
Before starting a test like running veggie oil, do a compression test on your engine (on a warm engine) this way you can know how much wear your engine has, then if you are unsure if this is harming your engine you can do another compression test and find out before you get stranded on the road.

Ill be honest i did not read all the posts so if someone arleady said this sorry... but the owners manual for my mercedes says to mix kerosen and diesel to reduce gelling. Gasoline and diesel dont work all that well together, there used to be people that claimed you should mix some gas in with every tank of diesel, but from what i've heard that is a very bad idea, because diesel compress the air in the cylinder and then inject the fuel which is ignigted from the air temp, and from what i was told the gasoline burns to fast and messes up the valves.

Vegtable oil in a diesel is actually probably better for older diesels that were build to run on 500ppm sulfur, because the sulfur in diesel makes it more of a lubricant so vetable oil has a higher lubricating property than does the Ultru Low Sulfur that uses 15ppm sulfur.

The idea of using vegitable oil or some other inexpensive additive to gasoline is very intriguing, but i believe that adding vegitable oil to a gas engine can cause some problems. What I am wondering is if homemade biodiesel using the transesterification process is safe to add to gasoline in small quantities. Since this process lowers the viscocity be removing the the glycerin molecules and replaces them with methenol which is a fuel additive.