it does get quite hot inside an engine .... hotter air holds more moisture .... warm, moist air flowing out to cooler, drier ambient air makes for visible vapor, kinda like "steam coming off coffee"
as someone suggested above, converting to a PCV system [available in 58, may even have been common on car engines, check your shop manual] will eliminate any combustion vapors out the draft tube, other than that there is no way to prevent these old-tech engines from 'smelling like oil'
Bill
