1965 195.6 oil filter

Exactly what I was thinking! I don't see a problem here with no ADV in the filter. If any air gets in at all it will be very little. The factory filter needed an ADV because of the high placement. If an ADV was needed with low mount upside down filters all filters would have one.

Anti drain back was for filters that mount on there side. Amc V8s Gen 2 & 3, Buicks.

The 196 OHV engine head gasket needs sealer on it. The latest Felpro gaskets say "no sealer required", but that is an old tech engine and has a narrow sealing surface on the right side above the side covers. It will always seep oil there, especially if no sealer was used on the head gasket. I always spray the gasket with copper coat in an aerosol can (or there is an aluminum spray that works as well). Back in the day Indian Head shellac was used, and I have used it. The copper/aluminum spray is easier. Two light coats with a few minutes drying time between. Even then you will get some seeping on that right side over time.  Has nothing to do with pressure inside the engine. The old ones with the road draft tubes were the same as those with PCV.

You COULD be getting too much air in the engine for the PCV to work as well as it could, but I doubt it. From the factory there is the oil cap, which has a steel wool "filter" in it, and a vent at the front and/or back of the valve cover. I've only had visible fumes coming from the valve cover when the engine has been roasted (run really hot... don't try it!! ;>) or has so much blow-by it really need a rebuild. I don't think having more "pull" on the PCV will help a thing, but might not hurt to try.

I don't think so. I've always had to use sealer on the head gasket. If the oil is coming from the seam between head and block the head needs to come off and the head gasket sprayed with sealer on both sides, then put back. Since the gasket is relatively new you should be able to use it. I wouldn't try reusing one that had been on an engine for more than a couple hundred miles or few months. Of course if it tears when pulling the head don't try reusing.

If the oil is coming from the valve cover you may have a bad gasket or warped cover. Set the cover on a good level surface and see if it's warped. The rubber gasket shouldn't be too hard. You can RTV the gasket in the channel of the cover (thoroughly clean the channel with brake cleaner or similar solvent first), then use a thin RTV bead along the edge before putting on the head to improve sealing. These cover usually leaks a little near the rear since the engine tilts back slightly.

The only other thing you could do is what AMC did -- relocate the oil source to the line that feeds the head. Not as easy as it sounds! You'd have to drill into the side of the block through the first cam bearing, tap the hole for the 1/8" line fitting, and slot the front bearing journal of the cam to line up with the hole. The slot needs to be straight and through about 1/3 of the diameter of the cam. A machine shop can do it, but only with the engine (and cam) out.

I don't know that it's worth the effort. This isn't a modern engine and it's going to leak some. Think of it like an old Harley. It shouldn't leak enough to "mark it's spot", but it will make the engine a bit greasy in some areas -- enough oil to collect dust and build up. It might mark a spot if it's run idling for a long time (15-20 minutes?), especially after its been run for a while, but probably won't. When I ran mine as a daily driver and put 7K a year on, it would easily use a quart every 1500-1800 miles just putting around town, a bit more running all day on the Interstate at 65-75, more like 800-1000 miles. I do mean all day -- drove it from Warner Robins GA  to Elgin IL several times back then, 16 hours each way, 880 miles and made the trip in one day. Used a quart of oil each way, and that was with a rebuilt engine. Just before I rebuilt it is used three quarts each way... which is WHY I decided it was time to rebuild! Running around at in-town speeds it won't use much, but on the Interstate running 55-75 for sustained periods it uses a good bit. It wasn't designed to be run for hours at high speeds, it was designed for 1940s traffic and road conditions.

The stock oil line feeds a passage in the head that goes up though one of the rocker supports to the rocker shaft.

If the leakage is from the head you need to pull it and put sealer on the head gasket. My car never smoked. It will leak a little oil and burn a bit too. I used points and a hotter coil back then, never used a pertronix on that car, but I would now.

I had 3.31 gears in my car with the 196 OHV and auto. It was fine in the mountains around Idaho. That long stroke helps! As long as you have 3.08 or better gears I think you will be fine. It won't be real quick, but it will pull fine.