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There is oil in the air filter-why?

I have an N reg escort that recenty had loss of power (20mph max), and smoke coming from the air filter when the engine was stopped. The oil and water levels are good. Having looked at it again today there was a breather pipe that had come loose and others from around the air filter, there is also some oil in the pipe that comes from the filter (which i think is a breather pipe). Any suggestions please :)
Amanda Moore, April 2008
To be fair you can expect some fumes in the air filter housing after the engine is switched off - its simply crankcase ventilation and the fumes are drawn up into the air filter where they pass into the engine for burning....less pollution apparently. Obviously the more worn your engine is the more fumes there will be. I don't think that any disconnected pipes will affect the performance of your car, but if you can only get 20 mph out of it there sure is a problem - perhaps with the ignition coil pack.

John, April 2008
link Click here to see other fixes for Escort.