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I talked to a Lycoming tech rep about the air/oil separator issue yesterday
and was told that the breather line also vents moisture that evaporates from
the heated oil.  It is definitely not something you'd want to return to the
sump.  He recommended not using a separator for that reason. I see no reason
why the extract couldn't be collected and dumped where YOU want it rather
than on the belly of your plane though.  It also sounds like a lot simpler
installation as well.

Skip Slater
IO-540 ES

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