Good on you for starting this thread, and good on you for wanting to do diff breathers as an early mod rather than trashing a diff before you learn how important they are.
However, there are some issues here you need to consider. Just take this on board from the basis of my experience.
Firstly, heater hose is a long, long way from ideal. Heater hose generally gets quite soft and swells if it's in contact with oil. It's preferable to use transmission cooler compatible hose. Fuel line also seems to be very durable.
Heater hose is often pretty soft too - it's not really designed for the environment under a vehicle where it's getting clobbered with sticks etc. A diff breather that has a hole in it is worse than no breather at all.
I would never run a breather up into the bodywork as you have in the rear. Drop your car on its side (or roof) and you also going to have to deal with oil over everything in the back of the car.
Normal practice is to loop the hose over on itself. This prevents water from being able to run down inside the breather. Even better is to terminate the hose with a small filter like a motorcycle fuel filter.
I'm not sure I've ever taken a proper photo of a diff breather with a 1/8 BSP thread run in the end and fuel hose used, but whilst it's not $12 to sort out, it's many times cheaper than the cheapest diff rebuild... So I thought I'd take some hasty photos of how I do it.
This isn't a step-by-step - it was just based on what I had lying around in the shed in the last 20 minutes.
So here's the normal barb sitting on the top the diff once the cap as been popped off.
You'll note with interest that it looks to have something stuck to it - that's the brittle, snapped off remains of clear PVC hose, which isn't suitable for breather use.
With that cut off, the cap looks like this:
Cut the barb at the base of the "groove"
And thread the barb with a 1/8 BSP tap. There is no need to drill the barb out before tapping, the ID of the stock barb is exactly the right size to take a 1/8" BSP thread.
Then you can screw a 1/8" BSP barb into the breather, and run (cheap) 6mm carby fuel line wherever you want to go.
Here's two different setups:
A straight barb on my car:
.
and a 90˚ barb on the trolley tug
Both of these have been under their respective cars for years and years with no attention. In fact, mine has been swapped from 1.0 diffs to 1.3 WT diffs along the way.
It this more than $12? Sure. It's a lot more reliable than the $12 solution though. I've seen countless failed diff breathers on sierras because people think they can slip whatever is cheap over the stock barb and call it good.
It's not a great feeling to find your diff breather broken after you've been driving through bog holes all day.
Steve.
PS Please don't think I'm trying to muscle in in your thread, thanks for starting the ball rolling.