James,
First, I re-drilled the breather into the same place as it is on my 4,08, so that puts it on the small step just above the axle tube. You'll see a flattened portion, but if you're having trouble finding it, let me know and I can dig out a picture. All I did then use two sump plugs to fill the two holes left by the cooling tube. So far I haven't had any issues at all with seepage. If you did want to maintain the sort of effect that the tube provides, you could use a flexible hose. Others have cut into the subframe to make room for the tube. I would personally advise against that.
Note that the breather on the 4,08 I had has a conical thread, thus drilling a new place for it proves interesting. Finally, if you do decide to drill a place for the correct breather, take precautions to catch the swarf, so use a greased bit and then consider flushing out the axle tube to remove any contamination.
I'm moving house at the moment, so don't have access to my computer for pictures, but let me know if none of this makes sense and I'll see what I can find.
JH