Try driving 3 hours in moderate rain and sucking up water slowly until your motor is water-logged... then sit in the cold with a car that doesn't start for 6 hours until you finally get towed after being refused because being a "low-rider" by 14 different tow-services... that would suck pretty bad wouldn't it?
you don't have to submerge the thing in water, but my filter was pretty exposed way back when, so constant exposure and water build up little-by-little can screw things up as well.
as for dirty filters, etc... if you read up on K&N's documentation, they actually state that a dirty filter works more efficiently than a new lubed filter... they're supposed to be dusty or somethin to work best... something to do with the oil used on the filter. just make sure there's no debris in the way of the filter sucking air, etc.
oh yeah, and cut the hole at the bottom to suck more air, but be prepared you will notice so little performance that it just might break your heart and realize that cold-air/hot-air it's all bullsh*t and you're really not gaining much at all. they may work well in conjunction w/other mods, but alone they ain't doin a whole lot.
gug