Thanks for the swift replies guys


There are three pipes entering. One from the bottom of the engine before the red valve, then after the red valve 1 from the head and one from the intake which then go to the canister. At the bottom of the canister is a pipe that dumps to atmosphere. It looks like a custom built canister.

What I am going to do is take the red valve out completely, and connect all the pipes straight to the canister then see if the oil is coming from the pipe venting to atmosphere on the canister, or somewhere else, and also double check for blockages.

If I still cant understand whats happening then I wil take some pictures.