Hi Bolt, it sounds like you need to replace the compressor for sure. If the truck is not going to see road usage I would probably opt for a used one from a salvage yard to save dollars. I can't tell you if it right or not but the way I remove oil from compressed air lines is to run mineral spirits, or naptha through an engine washing gun with a small tip. After removing the wet tank, use the suction to blow compressed air through the line while at the same time sucking up the liquid from a can. Do this until the sludge or milky buildup is gone, then run fresh solvent again. These two solvent are mild enough that they will not attack the plastic parts like lines and such. Be sure to purge the system of the solven with water as hot as you can get it by the same method. The blow compressed air to dry the system. Flush the tank by removing the drain valve and pouring solvent into the tank. Put corks, or stoppers into the openings, and shake like hell for a bit, change solvent, then do it again! Sounds like fun at this point doesn't it? Reinstall all parts with replacement compressor, and charge the air up. Drain the system rapidly via the wet tank a couple of times, then when the discharge air is clear and dry, you should be ready to go. I would inspect all valves and rubber parts for decay and to ensure all works well before putting into usage. As far as a drier: In your projected usage I really don't think you will need it. Most likely the compressor you have is a Bendix Tu-Flo 500, or 501 as they were most common. Looking at the identification tag; It will either be red, or black silk screened. If it is black, the compressor has never been rebuilt. If it is red, at one time it has been gone through. All rebuilders that I have worked with follow this convention. If you elect to have yours rebuilt, REI Brake Service in Chicagoland does a good job reasonable for a hobby truck. I've used them a couple of times. Just be sure to let them know it is not a money maker. These compressors are easily picked up at any truck salvage yard also. Rob