Take the breather cover off. You will see a tiny hole that allows the oil to drain back into the crank case. Poke some wire through the hole to allow it to drain back into the crank.
If it makes you feel any better, this exact same thing happened to me. You may have wallowed out part of the block where the valves/rods sit in addition to the valve seats allowing the block to become over pressurized, the result could be that the oil collects inside the little compartment behind the valve cover and shoots into your air filter.
1) clean out hole-run it around and see if that fixed the problem
2) check compression
3) check valve lash and adjust if needed
3) check compression
4) if bad compression you may need to grind valves/replace rings (bad rings could cause this as well as they could over pressurize the block)
The only other thing I can think of is that the actual surface that the valves/rods rub against is worn out. For the higher hp honda gx engines, there is a serviceable guide that could be replaced (I think I remember reading that) but I'm not sure if Tecumseh did that.
I ended up selling my Tecumseh engine because I found out that after all that effort, it STILL shot oil out of the breather tube (and other horrible experiences with their carbs) so I sold it to a guy for $200 explaining to him the oil dillema, then bought a non running Honda gx390 for $75, all it needed was a carb clean.
