IBenDcars,

There was a good explanation of how this type of filter functions not too long ago. The sludge and junk laying in the bottom of the oil bath are proof that this system works...that sludge is the junk the oil has trapped.

As the air flows through the filter it is required to make an abrupt turn. The air makes this turn, but heavier particles of dust and dirt are hurled into the oil medium. It looks like your filter is missing some of the mesh used in the filtering process.

Stuart