Not to mention the K&N does a horrible job of filtering, and lets oil by that can damage the turbo... . I would guess any increase in mileage is from a crappy filtering job... .
Agreed completely! The K&N WILL dust your cylinder walls and turbo, so if you plan on keeping your CTD for a long period of time it's not a matter of "If", rather "when" and to what degree. And yes, I know this from first hand experience from a trusted mechanic/acquantance that has shown me the difference on the cylinder walls. He has lost count of how many 3rd Gen and newer CTD's he has personally worked on running a K&N with scarred cylinder walls and turbo issues.
That increased flow doesn't come at no cost (poor filtration). Also, keep in mind that any unbiased study I have seen on aftermarket intakes (including TDR) show very little gain to even a loss on the aftermarket intakes vs the stock setup on the dyno. Agreed that the better flow of an aftermarket intake is needed to control EGT's on a MODDIFIED CTD pushing lots of fuel (i. e. CTD with a fueling box).