You can get 40W mineral oil at any small airport. It's call Aeroshell 80 mineral oil. It's used for breaking in airplane piston engines, like Lycomings and Continentals that power Cessnas etc. Most active airports have a gas station, called an FBO where you rent planes, buy pilot supplies, socialize etc. You can buy break in oil there.
The blowby obviously comes past the rings, so if the vent is from the valve cover, oil that drains off after lubing the rocker / valve assemblies has to drain down the same passages that the blowby vapors are comming up thru. That could be the cause of oil droplets in the blowby.
A crankcase vent from the crankcase cavity might be better for now, if it can be done easily. Use a long large diameter hose, slope it uphill. The oil will condense out in the hose and run back down into the crankcase. Run the hose outside the engine room. It's not healthy to breath it.
I agree, find some way to verify your oil level is not too high (or too low). If that's the problem, you would feel sheepish to have taken the engine apart
On the other hand, you could be suffering from a long break-in, so if you continue to get less and less blow by, then keep on running and checking and running and checking....
Most 2 cylinder 4 stroke diesels have a 180 degree crankshaft that sounds like a "pop-pop-swish-swish' firing cycle, so that might be the source of the inlet pulsations you noticed. I can't imagine an intake valve leak given the compression readings that you got.
If you can administer a static compression test (Piston at top center firing, add compressed air thru the injector port, also known as a leak-down test) you could listen for the leaking air at the exhaust pipe (leaking exhaust valve), the air filter (leaking intake valve), and the crankcase vent (leaking piston rings). And you could tell if cylinder #1 is the leaker, or Cylinder #2. Or you could get satisfactory readings, and keep running the engine, because 'not all third world engines are honed properly' and you might need a longer break-in.
Scott E
PS; I'm not a big fan of break in oil, You already have one of the finest oils made in your engine. Many engines break in on it, heck they probably run their whole lives on it. Run it short to collect and drain the swarf, change the filter and put in your new oil. Check the drain pan to see what came out (start with a clean drain pan). Cut open the filter with a pipe cutter and see if it caught anything nasty.
