We have been running Mobil 1 0-20w motor oil. But no lock up clutch. The motor oil seems to take a lot of heat. I've heard good things about the compressor oil, it will take a lot of heat, with out braking down.
If its leaking at the collector? Cut off the little flange that hold the 3 bolt flange on, and bump up the exhaust pipe to go over the collector about an 1 1/2". Then buy a stainless band clamp to go over it.
I think he is just running a dump trailer pump with a reservoir. Think about how many times you can run your dump up and down with no charging system. Sounds like a pretty simple set up. I mean people use a plow truck all day with out issues.