The dryer is full of a material that removes water from your system. This is a good thing since only one drop will plug up your system.

In theory it should work in any position, but in reality gravity has a lot to do with the R-12 (or whatever) being exposed to the drying element.

Is there no other place to mount it? You could always add some more hose. I know room is tight on some 108's, but there is a reason you always see these mounted as they are and it is because that is the way they work the best.