When I swapped the air filter on my 2kSE for a K%N drop-in, I noticed a large dark oily spot on the lower-left (while facing engine) of the filter. I didn't think too much of it a the time, since the filter had about 20k miles on it. However, when I changed the OEM filter to a K&N on my 2k1SE with only 2k miles on it, I noticed that start of the same oil stain.

I found that it's right where the recirculation loop comes into the air-box. The ammount of oil (and darkening color) that had already accumulated on the 2k1SE filter surprised me! Is this because I'm running dino-oil? Will it be better with synthetic? Obviously, there must be a way to avoid this recirculation since people do it when they install a "Franken-type" intake. What is done to the recirculation output? Does the ECU care/know if you disconnect it? Does this past DEQ (environmental quality check here in Oregon)??? For that matter, will any intake mod's pass DEQ?? (Anybody in Oregon passed with these mods?)

 

This is due to the PCV(Postive Crankcase Ventalation) system. It draws the hot oily blow-by vapors from the crank case into the intake to be burned up instead of released into the environment.

You can cap the intake side and put a breather filter on the valvecover side, but it has not been proven whether or not this is harmful long term.