You need to re-route your diesel fuel lines so that the diesel goes through both filters before the lift pump. The stock configuration has the fuel going through the in-line filter, then the lift pump, then the spin-on filter, then the IP. For VO to work, it needs to go in-line filter, spin-on filter, lift pump, IP (you'll have to be creative making that sharp U-turn without kinking the hose between the lift pump and the IP). Also, you have to plug the banjo bolt on top the spin-on filter with JB weld, or replace it with a solid bolt.

Once that's done, the diesel path should go through both filters, then to the supply 3-way valve (no T's are involved, you route the fuel line from the spin-on filter right to the valve). The VO should also go through its filter and FPHE and right to the supply 3-way valve. The outlet of the supply valve goes into the lift pump. You really don't need an extra lift pump on the VO side if you're heating the oil sufficiently (and it sounds like you are) but it can't hurt as long as it turns off when your on diesel.

For the return...the return line comes off the top of the spin-on filter (around the plugged banjo bolt) and goes into the common port of the return 3-way valve. Then you connect the diesel tank return line to the normally open port and the VO tank return line to the normally closed port. That's it.

The reason you have to re-route the diesel fuel to begin with is the lift pump is mechanical and will pump whenever the engine is running, so you can't block it off, which is probably why you're getting diesel in your VO tank. If your VO supply is T'd into the diesel line just before the IP, the lift pump is probably still sucking diesel and mixing it with your VO. So your VO tank may eventually overflow if you run it long enough.

Did you buy a kit or put one together yourself?

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1985 300TD-euro 352,000 mi
1974 240D (1?)52,000 mi - has a new home now