Hi Stan,
Sorry, I've been away from the forum for a bit...
The modern bypass filters that I've seen are cartridge type and are available in several sizes. Some of these use paper towel or even toilet paper rolls for filters. I don't know if I like that or not but as long as there is some sort of screen on the output side in case the paper breaks off it should be OK. Other filters use a cartridge element that you need to buy from the manufacturer. Big over-the-road trucks sometimes use the paper towel units and they supposedly only change the oil when it fails the lab tests for contaminants. Some of the guys with the old Dodge Cummins pickups have run them and claim that they work very well. I would do a little searching on the net and see what's out there for small units. The paper towel units are WAY to big for a Jeep. I think the factory made cartridge type might be less worrysome. Oil does not dissolve paper BUT I would worry about bits maybe coming loose. Like I said though, if there is a screen it might be fine to use. The input to the filter comes from the oil galley (might as well use the stock plug on your engine) and the output from the filter goes to the oil pan, or into the block just above the pan. (again, you may have a plug there too since these engines did have filters on them in some applications) . I can look on my M38 for exactly where the plugs are if you would like. If you can't find a modern filter that you're happy with you could always get an old stock unit. Napa still sells the cartridges for those. Best of luck - John