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How 'bout those Cowboys! Just kidding. It is hard to diagnose fuel problems remotely, but there are a few things that could cause your fuel dumping problem. If the bike has been sitting for a while, I could almost bet that you need to go through the carburetor and clean it at the very least. Could be the float or needle valve are stuck allowing fuel to dump into the air cleaner box. As far as the fuel petcock is concerned, for normal operation the long part of the handle should point forward (9 o'clock). To switch it to reserve, the handle should point straight back (3 o'clock). In both these positions, fuel will not flow until the engine turns over and creates vacuum, pulling a diaphragm open and allowing fuel into the carburetor. You will see a vacuum hose on the back side of the petcock going to the carburetor. If you turn fuel petcock handle straight down, that is the prime setting and will allow fuel to flow freely into the carburetor. That might be what happened.
I hope this helps you understand how the system works. There is a good tutorial on this website with pictures and possibly a video. It has been a while since I worked on my fuel system. Going forward, I would recommend you put some Seafoam into your fuel tank about every 6 months. It keeps everything squeaky clean. I use 1 .oz for every gallon capacity (about 3.5 .oz). Good luck and let us know how things turn out.
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