I would start by cleaning the sludge off of the side of the engine. With things cleaned up it will make it easier to see where the oil is coming from.

Yes, I would remove the flame trap from the holder and either clean it or replace it. Make sure the nipple off of the side of the flametrap is open. Also make sure the brass nipple on the intake manifold is open- a small drill bit works well for that.

The oil seperator can become restricted and create crankcase pressure which in turn can/will blow out engine seals. I had a very well maintained 88 DL that spit out its rearmain seal last winter. I had neglected to clean out the oil seperator and at 225,000 miles the restriction (not totally clogged) allowed pressure buildup.

If you find that everything is in order with no restrictions and you still get oil around the filler cap try changing the rubber gasket. They get old and brittle and do a poor job of sealing.

Randy