Factory canister filter setups (both bypass and full flow) were mounted to the intake manifold. If you need a picture, tell us, and I or someone else can try to post one.
Full flow does not equal 100% filtration. There is a pressure drop accross the filter. The smaller the filter the higher that drop is, for example. This is why Chevy used a bypass valve in the original filter heads on 59-62 261's and in the block on V8's. Ford used the bypass as part of the filter. It's to keep from starving the motor of oil that can't get through the filter fast enough.
When you go to one of these spin-on adapters, like I listed above, on a full flowed 235/261 or GMC, you need to realize that you don't have any way to bypass the filter anymore. That's why you go with the Ford filter, to get that bypass ability back.
The shifting issue is common to column shifters. It's probably a worn bushing or adjustment. Have you looked at a shop manual?
Take the side cover off the tranny and take a look. Usually, if they look good, they are good, but obviously there is no guaranty. I guess it's your call. About all I can say is that it would be the easiest solution, as it will give you some of your top speed back without having to do alot of other changes to the car. The drop from 2nd to 3rd shouldn't be too bad with a 4:11. If the 3spd works good enough through the gears for your tastes, then the 3spdOD will be also.
I like my T5 a whole lot better, though...
