sounds like someone
modified the pcv system (or it is different than the '85 model anyway). I have considered doing exactly what you describe. There is probably nothing wrong with it other than the fact that it may increase oil consumption slightly, in my opinion. Instead of the oil being returned to the oil pan it is burned in the engine. I would at least plug the line that comes out the bottom of the air cleaner just to insure that there is no way that "dirty" air gets into your engine (air that has not passed through the air filter). Where did they tie the line from the pcv connection into? Is is tied into the "flat" spot on the plastic piece that runs between the air filter and the turbo? To me this looks like the most likely place. Could you take a pic and email it to me?
When you do the torque converter just use a new crush ring and torque to spec and you should be ok. I always check for leaks from this plug after running it awhile and have even tightened it slightly more if I saw seepage. Purchase the Dextron III at WalMart.