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Shane,
you're probably right about the heat/condensation issue, but I'd still feel happier using a compressor that was too large rather than too small and was therefore running cool rather than hot. WRT the olive oil, I was basing it on my own observation that olive oil will make a mess out of teflon linings on pans and the fact that the manufacturers of the better teflon pans won't consider warranty claims if pans have been used with olive oil (apparently) due to its acidity attacking the coating. I haven't followed your links as I don't want to get into an arguement and you've obviously done a lot of research.
Thing is though, if olive oil is cheaper than the silicone oils used in dive compressors wouldn't they just market a "specially refined" olive oil for this purpose and thereby improve their profits?
Mick
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Condensate in tanks can be negated to a certain degree. Raise the compressor off the ground, remove the drain valve, screw a length of pipe into where the valve was and re-attach the valve to the end of that pipe. All the standing condensate will gather in the pipe not the tank if you are like me and forget to drain it as often as you should. There are also automatic drain valves these days which may be worth looking into. My compressor is at least 40 years old (Pulford), so old it has a Model A Ford piston in it and it was designed to never stop. When it reaches pressure it just unloads the system so the compressed air is diverted to atmosphere (I think that is how it works) I run this 12 hours a day in some cases and the stories about hot compressors don't gel. If any compressor was going to get to hot it would be this one.
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In my diving days in the RAAF (late 60's) we used compressors with water lubrication and carbon rings, or is that all a thing of the past?