when you instal the oiler, are you sure the rubber gasket is fully seated? it could be it's getting old and not sealing.
this one:
http://postimg.org/image/zeu9sl5ez/i bet whats happening is the pump is sucking air from the top of the tank, because that gasket would sort of be above the oil level and not feeding the pump. then it just pumping a small amount of oil with a whole lot of air, not making it out to the bar but blowing back into the tank.
that rubber gasket should be a tight fit between the pump housing and the tank top.