Moisture is a natural by product of an air compressor. Yes, you can put a larger air filter on, quiets the compressor down a lot, too. If you EVER plan on painting with that compressor, don't get near it with wd40!!! It'll stay in the tank and lines forever!!!! You could get a "sneezer" for the bottom, it discharges a bit of air everytime the compressor shuts off. Helps keep the moisture out. In humid weather, I crack the bleeder and get rid of the water sometimes 3 or 4 times a day.....