I've got a couple things to add.
First it was not mentioned so I'll say that you should never use pvc for air lines, even the schedule 80 stuff. It is not designed for it and the sudden closing of a valve or air tool will cause a hammer much like a water hammer and burst the plastic pipe sending plastic chards into the air and causing injury if you're nearby. Dont believe me ask at a reputable plumbing supply store(not home depot or hardware store).
I used galvanized pipe throughout my garage with drip tees and drains very similar to yours. I have two drops for air hoses, one drop for my blasting cabinet and one connection up high for my sir hose reel. The galvanized was cheaper than copper when I priced it so that's what I got. I also have a pressure gauge just like yours.
Next, for the water seperator to function the best it should not be mounted close to the tank as above. It should be 10-15 feet from the tank for the best water removal.
I had no choice but to put my whole compressor in the attic above the garage. I do have it sitting on a 1/2" thick rubber mat for vibration and noise but it's still noisy down below due the whole thing sitting on the wood attic floor. The sound transmits through the whole house!
One more tip. I kept thinking of what could happen of something failed on the compressor (mechanical, belt, or the motor itself) while it's up in the attic or if I wasn't home because I'm bad at turning things off when I'm not using them. So I wired a twist timer into the motor starter and now when I want to use the compressor I just have to go over to the wall in the garage and twist the knob to whatever time I think I'll be needing the air. When I leave the garage or the house I know that the timer will time out and nothing will happen when I'm gone. Just a sefety feature that gives me piece of mind.
Does anyone have experience with the automatic drains for the compressor tanks? I bought one from harbor freight but I never installed it. Does anyone here have one?
Great tips Dennis and I hope you realize I'm just trying to add to your already great thread.

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John
62 Falcon 2 door sedan, 63 Falcon Sprint Convertible, 71 Ranchero GT, A bunch of other toys and no time to work on them all!

2008 New Years Resolution = Get my falcon on the road!!!!!!!!