My truck still has the noise but only when the engine is warmed up. When I start the engine and before it is fully warmed up, there is no flow through the Motorgard and there is no noise either. This tells me that the relief valve in the Permacool is functioning correctly and I never get any indication from the idiot light (no gauge unfortunately) that there is an error status as far as oil pressure goes. At any rate, the noise starts when the engine is fully warmed up and not before. There may actually be oil flow into the filter but I can't feel any movement in the hoses like I can when it is warmed up. Evidently the oil viscosity is thicker when it is cold and thins out enough when warmed up to allow flow into the Motorguard. I am running Amsoil 10W-30 full synthetic.
As the engine warms up, the Motorguard starts to warm up as oil flow starts through it. The more the engine warms up, the louder the noise gets. At full operating temp, the noise is pretty loud inside the cab. At road speed, I cannot hear it.
I drove the truck to Houston from Corpus Christi (230 miles) and the truck ran great. So I am not worried about the noise...I know it is in the filter housing (or hoses?) although I can't isolate where exactly it is coming from. Anyway the filter is doing what it is supposed to be doing as is the Permacool sandwich adapter. It is interesting how the flow to the Motorguard is somewhat restricted until the oil gets hot. When it is hot though, there is absolutely no doubt that it is going through the filter! I can both feel it and hear it...I do not think I need to drill a small hole in the Permacool adapter. The noise is not valvetrain noise either. I would still like to figure out what the noise is though.
BTW, the kit ccontents were top-notch quality. The hose is nearly indestructible, the fittings were perfect for the application, and this lead to a great looking and clean install. Thanks Ralph.