For it to condensate and go back to liquid the temp in the motor must be all the way cooled down. when the ethanol goes from liquid to gas it expands and this would make some pressure so before the iron block gets cooled down to the point where the ethanol goes back to liquid i think it would go out the crank case vent i have not taken my evo's crank case vent apart but i am sure it is better then most N/A cars which have been making do with E-85. i know what ethanol does to oil i have been doing research on Biodiesel production at the company i work at. But the ethanol or methanol alone will not brake down the oil it will cause some separation but the ratio of oil to ethanol is very high. Btw Methanol is the choice when making biodiesel because of cost and is much better at braking down the oil chains when mixed with sodium methoxide.

Here is how most of the honda guys vent the little turbo motor's







This would also work as a still and collect all the ethanol in the catch can.