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I think you are talking about the CDR valve, about the size and shape of a tuna can.
CDR valve = Crankcase depression regulator valve. Some dealers call it a cank case vent tube adaptor. I would leave it there.
It is designed to regulate the amount of blowby gasses and oil mist that always builds up in the cankcase of any engine. Diesels have a lot more blowby than gassers, so a PCV valve would not be able to cope. Without this thing, oil consuption would be much higher. High oil comsumption complaints are sometimes caused by this valve being clogged or damaged.
Not really. Banks has an adapter fitting that puts a vent outlet at the injector pump drive gear housing and routes a hose to the CDR on the air filter box. I ended up modifying my valve cover and wielded in my own baffle.