I plan on tapping my diff cover (at the stock overflow hole) for an overflow and was wondering what size I should use, I have some -4an line laying around and was going to buy a an-npt adapter but not sure if a 1/8in pipe thread is gonna be too big

uhm . . .. Diff cover on wut type of diff/car ?

e36 diff cover in my e30m3

Drew, The vent lines on my Touring Car are around 1/8" maybe even 5/16", and I'm sure they are original from Prodrive.
I dont think you can go too big, if I am understanding you correctly.
It will just push up the line, then fall back down when it cools.
There is never anything in my catchs, all just drains back down the line to the diff and the trans.

Hope this helps.
jimmy