There is something ya'll should note that Tom Langon pointed out to me.

The 235 and 261 were both set up to run without a filter. The 261 block has a diverter plug pin set in the block just above the front 1/2 NPT hole. When the pin is fully pushed it, it diverts the oil flow from the pump directly to the filter. If that pin is pushed in, you must either install a filter or at least route the oil from the front hole on the intake/exhaust side of the block to the rear hole, otherwise there will be no oil circulation and you'll get bearing failure pretty quick.

My 1962 261 just had 1/2" soft copper line from the front hole to the back hole with the oil pressure line run to the rear fitting.

I don't imagine it matters much where you put the oil pressure sensor line in this circuit, unless you think that as the filter gets obstructed the actual pressure in the engine will reduce because the pressure coming out of the filter to the block is lower that what comes from the pump to the filter. In that case, the oil pressure line should come off the filter 'output' line.

If your 261 does not have the diverter plug pushed all the way in, no matter how many filters you put on that line you won't be filtering the oil.

I'm putting a remote filter on it from NAPA during the rebuild and am planning on mounting it using the threaded engine mount holes just behind the generator, 1/2" soft copper and compression fittings. I'll put the oil pressure sensor line on the outlet side of the filter. Once I get it done, I'll post some pictures if anyone is interested.

'51 Chevy 1/2 ton w/'62 261, HEI, offy, fentons, dual carter/webbers, t-5 & 12 bolt posi