Just a follow-up from David Schwarze's very helpful advice. The engine is 
a rebuilt GEX with about 7000 miles on it. Unless GEX has pulled a fast 
one...the main bearings should be ok. The oil pump was checked out by a 
reputable VW 
shop in Menlo Park and they said it was ok, they also set the timing and 
fuel mixture so the engine would not run hot. A mechanic also told me 
that an engine with worn main bearings will not produce high pressure 
even at cold startup. The flaps are also tied up 
so that could not be the problem. In other words, every precaution has 
been taken to ensure that the engine does not run hot. The oil cooler WAS 
taken from the previous engine which had extremely low compression and 
was not worth salvaging. I cleaned out the cooler (the Muir way) but in 
retrospect it may have been better to replace it.

The thing is, the engine oil light never comes on at idle no matter how 
much we drive it (we covered about 450-500 a day coming back from CA) 
with the second oil cooler - still in this hot weather oil pressure will 
not budge above 30 psi unless the Van has either been at idle or going 
down hill.

A good of rule of thumb so I was told is 10 psi per 1000 revs. However I 
recall David S. saying that he shuts his engine down after reaching 30 
psi on the highway...hmmm. The engine head temp by the way never exceeds 
220F at speed (for whatever that is worth).

I still think the cooling setup for oil cooler is both bizarre and 
inadequate. Still curious and looking for answers - DC