If the system is plumbed correctly, the hoses coming from the tops of the cylinders should be returning the "extra" oil from the tops of the cylinders to the pump reservoir when the cylinders are extended. If that's the case, then yes, the vent hole in the cap should be plugged.
I agree with the others in that the oil in the tops of the cylinders was/is also contaminated with water, and that contaminated oil was returned to the reservoir via those top hoses when you raised the loader the first time after putting the new oil in.
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Today's Featured Article - Choosin, Mounting and Using a Bush Hog Type Mower - by Francis Robinson. Looking around at my new neighbors, most of whom are city raised and have recently acquired their first mini-farms of five to fifteen acres and also from reading questions ask at various discussion sites on the web it is frighteningly apparent that a great many guys (and a few gals) are learning by trial and error and mostly error how to use a very dangerous piece of farm equipment. It is also very apparent that these folks are getting a lot of very poor and often very dangerous advice fro
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