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You are correct in that there is too much pressure in the crank case. Engines need both a PCV valve and a breather.
The PCV valve just allows a small amount of air to be drawn into the engine. This valve helps ensure a flow of fresh air into the crank case. Without it, your engine oil would get contaminated by blow by past the rings and eventually the engine would wear out prematurely.
However, most engines will, at times build more pressure than the PCV valve can handle, so the excess needs to be vented through the breather. Put the breather back on. As for the oil, there should be a baffle in the valve cover to divert most of the oil. If the baffle is missing, (sometimes it is in cheap valve covers) or if you have lots of blow by, oil will come out the breather. Its not a problem unless the amount is excessive. Try reversing the position of the pcv valve and the breather, if you can.
BTW when you just had the hose going to the bottom of the carb, it was like having a massive vaccuum leak in the intake manifold. It would disrupt your carb jetting and performance. You did the right thing by adding the PCV valve.
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