This type of air filter is called an "oil-bath" filter. The design makes incoming air change direction rapidly while very near to the surface of an oil-filled pan. The contaminant dirt particles in that air, due to inertia, cannot change direction as quicky are trapped in the oil. Oil-bath filters work excellent in high dust environments, because they can trap a lot deal of dirt relative to their overall size without becoming clogged like a paper filter. They do however, emit hydrocarbons continuously and are less environmentally friendly than a paper filter.
The air filter in a 71 Karmann Ghia is an oil bath type. Some may use the direction change like mentioned elsewhere, but the Ghia cleaner specifically forces the air through the oil in the bottom of the air cleaner, then it passes through two horsehair elements before going to the top of hte unit, then out through the pipe that connects to the carburetor. There is a reddish-orange line in the bottom of the unit to show the correct oil level. Although many change this unit out for one of those little chrome dry filter units, the stock unit flows into the carb better and has the proper preheat.
The PCV system is not pulling in fresh air to the engine.
There's a hose that runs from the top of the engine/transmission to the airbox. This is the Crankcase vent hose. Pressure in the crankcase caused by blowby is relieved into the airbox to reduce pollution. It's 100% normal for there to by oil in the bottom of the airbox Running the engine for long periods of time above 8,000RPM will increase the amount of oil in the airbox. There's a little drain hose on the bottom of the airbox, just pull the plug and let the oil drain out into the pan everytime you do an oil change.
SAE 10w40
There will always be some oil in the intercooler. Part of the emissions system connects the engine breather to the airbox. As the turbo sucks air through the airbox it tends to suck some oil into the intercooler.
5w-30
when the ttr 90 is flipped over oil pours into the airbox.
The Airbox handles overflow of oil. Just unplug the tube from the airbox (it is the shortest one hanging down on the right hand side of the motorcycle, with a plug in it). Lean the motorcycle over towards the right - careful not to drop it - and all the oil is stops coming, it should run.
5w-30 is what most use, unless you live in extreme cold etc...
petrol-underneath on the front of the engine diesel- ontop, on the right hand side between the engine and airbox
Your bike has blow by where is the engine needs to be rebuilt, oil is passing by the oil rings on the pistons.
Filter is down in front of airbox at front of engine you will need approx 50mm socket on small ratchet with twisty neck