Update: some questions answered and some new. Well it's not air that's mixing with the diesel, it's water. Diesel cap was cross threaded and when it dumped rain for a few days, water must have gotten into the tank. Draining lines, replacing racor, fuel filter et all. Found something very strange when I opened tank to drain and clean out, the diesel/water in there is almost black! Obviously oil must have entered via fuel return line, what might account for this? Draining, wiping clean and dry and starting with fresh diesel. Will change oil too just to be thorough.