1. Is this how this car came from the factory?
Not likely but see next answer for the exception.
2. Should I switch from the sealed oil fill cap to a breather cap?
Maybe depends on all the other parts of your PCV system. with any PCV system the engine needs a way to bring air into crankcase. The one exception would be if the valve cover has a separate hose fitting to go to the air cleaner or if the side cover has hose to air cleaner, than you could than use a sealed or closed cap.
3. Should I use an open filter style breather cap?
You can some way the engine needs to breath air into it, but it is not really the best way especially if you are still using a stock type air cleaner than is better to run the hose to it. Though it dose work it allows more dirt into the engine.
4. Should I use a breather cap with a hose that runs into the air cleaner and either modify my air cleaner or find one that already has the setup for a breather cap with a tube?
Can you post a picture of your engine’s air cleaner and PCV hookups it really helps in determining what’s right, or else describe it some more? If the car was suppose to be 100% original it’s starting to sound as if some parts could have been changed.
5. What are the advantages/disadvantages of each system?
Early engines had road draft tubes with an open breather type oil cap. Is the worst of all systems, it worked but allowed lots of dirt into the motor and they would wear out much faster. If you ever had the experience of working on any of these old engines they can be full of enough sludge to fill a quart or gallon container I usually convert the old engines to use a PCV valve.
PC systems can be of open or closed type and were factory installed on some Fords in 1961. The difference between the two is slight an open system uses the filter type breather cap it’s a very good system but it still can allows fine dirt to be drawn into the engine and it will wear out sooner. A closed type system has a breather that is connected to the air cleaner still allows the engine to breath air into the crank case but is also filtered more finely engine stays cleaner inside and last much longer.
6. So what should I do with the PCV system on my 200?
You should make sure you have all the right factory type parts so PCV operates as the factory designed it. I would need to see what you have to know if it has the right parts or not. Are you sure that your oil cap and air cleaner doesn't look like the two pictures in xctasy's post above?
Not likely but see next answer for the exception.
2. Should I switch from the sealed oil fill cap to a breather cap?
Maybe depends on all the other parts of your PCV system. with any PCV system the engine needs a way to bring air into crankcase. The one exception would be if the valve cover has a separate hose fitting to go to the air cleaner or if the side cover has hose to air cleaner, than you could than use a sealed or closed cap.
3. Should I use an open filter style breather cap?
You can some way the engine needs to breath air into it, but it is not really the best way especially if you are still using a stock type air cleaner than is better to run the hose to it. Though it dose work it allows more dirt into the engine.
4. Should I use a breather cap with a hose that runs into the air cleaner and either modify my air cleaner or find one that already has the setup for a breather cap with a tube?
Can you post a picture of your engine’s air cleaner and PCV hookups it really helps in determining what’s right, or else describe it some more? If the car was suppose to be 100% original it’s starting to sound as if some parts could have been changed.
5. What are the advantages/disadvantages of each system?
Early engines had road draft tubes with an open breather type oil cap. Is the worst of all systems, it worked but allowed lots of dirt into the motor and they would wear out much faster. If you ever had the experience of working on any of these old engines they can be full of enough sludge to fill a quart or gallon container I usually convert the old engines to use a PCV valve.
PC systems can be of open or closed type and were factory installed on some Fords in 1961. The difference between the two is slight an open system uses the filter type breather cap it’s a very good system but it still can allows fine dirt to be drawn into the engine and it will wear out sooner. A closed type system has a breather that is connected to the air cleaner still allows the engine to breath air into the crank case but is also filtered more finely engine stays cleaner inside and last much longer.
6. So what should I do with the PCV system on my 200?
You should make sure you have all the right factory type parts so PCV operates as the factory designed it. I would need to see what you have to know if it has the right parts or not. Are you sure that your oil cap and air cleaner doesn't look like the two pictures in xctasy's post above?