Bflee and Alfresco are correct - the manual says to idle the engine for 3-5 minutes, shut it off and then wait for 2-3 minutes before checking the oil.
However, the oil can be checked on a cold engine, also. You just have to realize that you will get different readings. With most engines (automobiles, lawnmowers, etc.), warmer oil will have a slightly greater volume (thus giving a slightly higher reading - just like the "cold" and "hot" level markers on the power steering fluid reservoirs on your car), plus warmer oil flows better and measures on a dipstick better. (Thus the reason you warm the motor before draining the oil for an oil change - it drains better.) But, it's not necessary to have a warm engine to check the oil.
However, if your bike has an oil cooler that is mounted higher than the engine - as do many ATV's - you will get a lower reading when the oil is warm from running than when it's been sitting for a couple of hours, because the oil has drained through the pump and back into the crankcase. In such a case, running the engine and then taking the oil level shows the operational level of the oil with the oil cooler full of oil - obviously a critical reading.
I recommend doing it both ways so you can see the difference. Check the oil when the engine has been sitting for a couple of hours and is stone cold. If you have an oil cooler that is set above the engine, you'll probably see the oil pretty high on the stick. Then start it, idle it, shut it off, and let it sit for a couple of minutes, then check the oil level again. Make note of the difference. The warm level reading will be pretty close to the actual operational level. Remember, you want to avoid overfilling the crankcase because of the excess crankcase pressure that creates. Warm oil shows the operational volume level, and thus is the "safest" level to fill to - thus the reason it's the recommended procedure in the manual.
And that brings me back to ToXic's original question. Assuming it was filled to the proper level before operation (and his post indicates to me that it was), oil blowing out of the dipstick hole indicates, in my mind, excessive crankcase pressure and could be an indication of a plugged breather tube. Have you cleaned the little foam breather tube filter in the airbox, usually right under the main air filter? That's where I would start.
Last edited by melsman; 03-11-2012 at 07:05 PM.
Reason: D'oh! Forgot about the effect of the oil cooler. Made the appropriate corrections.