All hydraulic systems develop pressure due to the microscopic air bubbles in the oil. Oil itself doesn't compress so cannot produce pressure only flow. The oil is the lubricant, cooling mechanism and the solid that causes movement - you don't need any oil to actually cause movement, any gas can do that. Cavitation can occur in pumps, motors, valves, cylinders, sharp bends, etc, etc, when the microscopic air bubbles expand due to low pressure i.e. motor over running, hence anti-cav valves fitted to motors.
Aeration is introduced air in a system on the suction side of a pump, motor (suction side on over run), valves on the low pressure side, leaking cylinder seals, etc, etc. Dieseling is when the enlarged air bubbles from cavitation are suddenly compressed again and explode - diesel. Aeration usually causes wear (lack of lubrication and cooling), can cause dieseling - on the pressure side of a pump or cylinder. Erosion is caused by dirt, metal, cavitation and dieseling.
and the thousand other causes and scenarios of problems in hydraulic systems. Generally you need positive pressure to the pump and no air in a hydraulic system and as already stated, the return line must be below the lowest oil level in the tank.
and jplambs, you will 100% guaranteed fail components early in your hydraulic system with the setup you have. How early is in length of string territory.
Rick



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