for a breather i would think you could use just a small brass filter that you could tap into the top of the case(maybe run extension tube). i wouldn't think it would have to be much. the big thing is just make sure the gears are set right or if off by little they could eat up real quick. if you use a gear lube that might rob little power from the motor:shrug:
i guess it depends on the type of metal the gears are made of and clearance etc...
pete jackson geardrives that i had in my chevys ran a loose/poor clearance and only had motor oil on them. but then again the two center gears only had to float on the bottom and top gears. that maybe something total different then what you are trying to do. yours are more fix gears.
also seen some gear cases use just tranny fuild........:shrug:
what it comes down to is,alot of us would like to see this work........:thumbsup: