Flood-controlled ancient dikes play a significant role in flood control and have received widespread attention as historical and cultural symbols. Flood-controlled ancient dikes often undergo disasters, and research on their repair is receiving increasing attention from experts and scholars. This article studies the control of seepage and bank slope instability in flood-controlled ancient dikes. Starting from the repair of ancient dike materials, three types of work are carried out: a test of soil’s mechanical properties, finite element numerical simulation, and repair technology research. The research results show that the soil of the ancient dike site has hardened after being contaminated with waste oil from catering. The strength index of the ancient dike soil decreases and shows brittleness when the water content is 15% and the oil content exceeds 6%. The strength index and permeability coefficient of oil-contaminated soil improved using modified lime mortar (MLM), which was achieved using the method of MLM to repair oil contaminated soil. When the MLM content was 10% and the oil content was 6%, the friction angle of the soil sample reached its maximum value. When the MLM content was the same, the higher the density of the soil sample, the greater the friction angle and cohesion and the smaller the permeability coefficient. Establishing a finite element numerical model, through comparative analysis, it was found that after MLM remediation of oil-contaminated soil, the extreme hydraulic gradient of the ancient dike decreased by 31.3%, and the extreme safety factor of the bank slope stability increased by 31.2%. MLM pressure grouting technology was used to improve the soil during the remediation of contaminated soil at the ancient dike site. Through on-site drilling inspection, the effective diffusion radius of MLM grouting was obtained, and the plane layout and grouting depth of MLM pressure grouting were determined. The on-site water injection permeability test showed that using MLM pressure grouting technology can effectively repair oil-contaminated soil in the ancient dike while reducing the permeability coefficient by 8–15%.