[Bob Lincoln]

That would be the breather hose, which draws filtered air from the airbox into the crankcase. It should connect to somewhere such as a valve cover that is in communication with crankcase air. The 'greasy foam rubber' is probably a filthy, never-changed breather filter (which should be changed every couple of years). It should not be left disconnected.

 

[vanagon40]

The hose to the valve cover connects to the upper fitting, visible upon close inspection just above the rail post and circled hose.

I just ordered a new crankcase breather element to replace the greasy hunk of foam rubber.

I still think the bottom hose vents (drains) to the outside air.

 

[george w]

The lower hose is just a vent. It drops down inside the triangle of space formed by the lower alternator bracket and hangs free, The upper nipple connects to the valve cover pcv hose.

 

[vanagon40]

The lower hose is just a vent. It drops down inside the triangle of space formed by the lower alternator bracket and hangs free, The upper nipple connects to the valve cover pcv hose.

Thank you for confirming that.