I have a diagram somewhere that shows the "ideal" setup, but here are the high points (from memory):
1. Move the dryer/filter farther away from your tank. It will be much more effective when the air coming to it runs through a pipe with a few bends.
2. Ideally you want your air to run through a series of pipes with a few 90 degree bends before it gets to the filter. This forces the water in the air to form larger droplets that the filter can more easily screen out.
I built a system loosely following the diagram my local paint shop gave me but used a couple of 50' hoses to roughly simulate what I described, and put the filter at the end of that. My water separator collects a whole bunch of water and I get very little coming out through my tools now.
Hope this helps. I will try and find a diagram like what I mentioned above.
This is how we have the air lines run in the shop at work. They come down from the ceiling in a "U" shape with a water valve on the very bottom then goes up to the air line output. In the booth it's basicly the same way but have a 3 stage filter system in there. We used to have an air dryer but it broke years ago and we don't have water problems in the paint/body shop. The mechanics lines don't run the same way as ours. Theirs just goes from the ceiling to the outputs with no drains and they get water in their lines.
Also drain the water from the compressor daily. There should be a valve on the very bottom of the tank.
Also use a larger pipe for air lines. Our booth guy told me that too small of a line builds up heat which causes the water in the lines. Need to keep the air as cool as possible which is what an air drier does.
I have a 7.5 HP 80 gallon Ingersoll Rand here at home and get water in my lines too. Haven't had time to run lines like the shop but I keep the valve on the bottom of the filter cracked and get little water coming out.
