I've had this problem for several years on my '65, and never have been able to 
clean it up. I do have an aluminum pulley, so I'll try swapping it out with a 
stocker to see if that helps.

I too suspected the breathing, and went so far as to try vented valve covers and
a separate breather box mounted on the ceiling of the engine compartment. It 
didn't do squat to help the oil misting problem. 

BTW, is that what you guys are seeing....misting? My entire engine compartment 
gets coated, not just the pulley area.
 
I have noticed that the misting only occurs on the freeway or if I'm zooming up 
and down big hills. The oil mist covers the entire engine compartment and is 
virtually impossible to figure out where its coming from. I figure somehow oil 
is getting inside the fan shroud before it gets blown everywhere.

I also suspected the stock oil cooler seals, thinking that they may be leaking, 
allowing the oil drips to get sucked into the fan shroud. I replaced them and 
that didn't seem to help either.

I also have a full flow circuit with cooler and filter, but this part all seems 
pretty dry and tight.

I've had the problem ever since I rebuilt the motor, and have kind of run out of
ideas.

-Erik

NSC Analog Automotive Systems  Tel. (408)721-3476  Fax (408)721-8292  M/S C2611