Its probably more likely to be nasty from a leaky inner axle seal than anything else, however, that little nipple thing with a cap on it is a one way valve that is a horribly crappy design. You can pry off that little cap easily, and its possible to hose clamp a tube directly on the leftover stub for a breather, however, with this method the valve itself is still in place I belive, and there really isn't enough room for a solid seal between tube and axle.
On the front, this is easy to fix.
Unscrew the whole valve thing out of the axle housing, get a brass barbed fitting with the closest threads you can find to the original valve. Screw this barb in, with some thread sealer if you wish. Now you have a sealed connection between axle and end of tube.
The rear is not so easy.
As you have probably noticed, the one-way valve deal is part of the brake t-fitting. There is a writeup somewhere about how to get around this, brainstorming right now heres what I think-
1) Just remove stock T from axle housing with one way breather. Install barbed fitting as outlined earlier, just let stock hang.
2) get a new t, mount it somewheres else and run new brake lines; install barbed fitting as aforementioned.
It think either of these two methods would work. I'm not sure. I'm getting ready to do breathers too (maybe tomorrow?) if so, I'll let you know what I find.
Edit: oh yeah, use clear tube (available at any hardware store). That way you can see whats goin on.
