Looking for some ideas on what to try next.

When in a mud hole or going up a hill at half throttle the machine startes to sputter/gurgle on me.. If I feather the throttle it will come out of it and run fine... Funny thing is that it doesnt do it every time.. It has done this since brand new... It only has about 500 miles on it.

This is what we (dealer and my self) have done over the years..
drained fuel, cleaned gas tank, cleaned carb, rejet carb from 172.5 to 167.5
replaced air filter, air box rubber seal, fuel filter, spark plug, inspect coil, tried different octanes,new belt, battery, seafoamed..

after my last ride I did notice a heavy fuel smell in the air box and what looked like oil and fuel puddled up at the end. They seem to be comming from some hoses going into the air box..

 

When you say "over the years" how long has it been since the needle and seat has been replaced along with checking the float setting? You've got the old style carb(which is good!) which is easy to replace the needle and seat and also when you hold the carb upside down the float level should be parallel with the carb body when setting on the float needle. Easy to adjust by slightly bending the tang if it isn't. Normal to have some oil mist in the airbox because this is where the crank case and oil tank venting has to go. A lot of oil isn't normal and can be from an overfull oil tank, constant steep hill climbing,plus gas can mix in with the oil also in the air box. I'd first check the oil tank for proper level along with any gas smell to it. If so I would change the oil and filter then check the carb out along with the air filter and prefilter. OPT

 

Thanks OPT for your thoughts... I have had the carb rebuilt twice. Once under warranty and once on my dime.. Would they replace the needle then? We also had it off a couple weeks ago and rejetted. Everything looked really clean inside.

 

Looking clean doesn't mean that the needle and seat aren't worn! You can remove the float assy and pull the needle out of the seat and sometimes can tell if the sides are shiny and worn along with a worn rubber sealing tip and inside the seat looks worn.But if you take the carb apart,might as well replace it! Dealer may or may not not have replaced it,plus sounds like the carb is where you're having problems,either starving for fuel or running rich going up hills. Plus you can raise or lower the slide needle and see if it helps on midrange,plus did it run better with the 172.5 jet? This was the stock jet for sea level to about 3000 feet. The 2004 model 400 used the smaller jetting. Plus don't know if the ecm module would have anything to do with this?(I believe the 2004.5 400 had the ecm module unlike the 2004 which just had the regulator/rectifier. OPT

 

OPT, the oil does smell a little funny. Level is perfect.
Going to change along with all filters.. Also going to try a needle and seat.
And check the float.
By the way this has done this since day one... first ride

Didn't notice any difference with the new jet. Dont know if I should go back to the original jet...

Will keep you posted and thanks for the help!