My limited knowledge of diesels is further limited to Mercedes
turbodiesels, so take what I tell you with a huge grain of salt...
Looking at how my OM617 engine is set up, you should have a breather
tube coming off the valve cover and running to the air box.  There
should be some sort of oil trap in the airbox that will drain
collected oil back to the sump.  Are you sure he used the airbox from
a diesel?  Doesn't sound right that he had to hack his own "90 degree
elbow" into it.  Can you read a part number on it?

In any event, I'd suggest getting ahold of a good reference (e.g. a
Bentley) for this engine and studying how the original breather hose
routing was set up.

As far as the oil blowing out the dipstick tube this was probably
because you had blocked the breather tube when you jammed the
screwdriver in it and there was no other place for the pressure to
go.  Some blowby is normal and if you seal up the intended venting
then the pressure will force its way out of places that you don't
want it to.

For most engines if you are above the "add" mark on oil you don't
need to add any.  You might try seeing if it "stabilizes" at some
point above "add" and if so don't keep topping it off, it may just be
getting burned up or blown out.

Do you have any idea how many miles are on the engine?  What its
history is?  Does it start easily?  Does it smoke a lot?

And, water under the bridge now, but when the seller said you'd need
a gallon of oil to get from Albuquerque to Portland that should have
set off some alarms.  That's about one quart per 300 miles.

Good luck!

Allan