I made some more progress with the engine today.  I managed to get the oil to finally stop exiting the dipstick hole.  The cause was, as I suspected, related to the crankcase pressure. So, I spent some time fiddling with the PVC and breather system.

First, I bought a new PCV valve.  Next, I connected the valve cover ‘breathers’ together with the intake breather and fed them into the aircleaner.  Now that the pressure is a bit more equalized, the oil stopped getting pushed out the dip stick hole.

So one problem down, but now a new one.  The air getting cycled into the air cleaner was ‘dirty’ enough that it was affecting performance a bit.  However, I’m hoping once I get the new jets for the carb,  it will stop burning so rich, which will clean up the system.  That’s the theory anyway.

While I was researching breathing systems, I learned a bit of history about the PCV Valve. It turns out that PCV valves were invented during WWII to enable tanks to ford deep water and still have their systems breath appropriately.  Following the war, someone at the GM plant where the PCV Valves were built realized they could help combat some smog issues. You can learn more about this at Wikipedia.