I have the same dryer. It helped alot and the results were immediate. I did install a "coalicing" (spelling?) filter right at the plasma inlet to keep out oil (the dryer does not stop oil) some time before but the dryer was the biggest improvement. One thing I do notice, in order for the dryer to drain, the pressure has to be relieved. I do this at least once a week and water just pours from the dryer. I have a ball valve at the outlet of the air comp that i swing closed and attach a blow gun to a free line to drop the pressure. The dryer is mounted over my head, so I have not seen were the water comes from but it does flow quite a bit. I also stopped coating the nozzle and electrode with anti-spatter internally, I can get away with this on oxy tips but the plasma parts don't like it. I will spray a light coat on the shield once in awhile.
What is happening to your consumables? does it seem like a problem with arcing between the nozzle/electrode? I recently had what appeared to be a problem hear, it caused the electrode to pit the center deeper and faster than usual and the nozzle went out of round. I changed the swirl ring (after lots of parts and blank staring) and it all cleared up. I went back to inspect the old swirl ring and could not see anything obvious, but problem solved. Wierd, but the cut would start to lean in one direction, not the same direction every time but consistent enough to see it right away. I suppose the swirl ring got out of round or something of that sort, causing the electrode to stick.