there are aftermarket filters that are legal. a standard desnorkel job on a stock filter is not legal. it's all about the diameter of the inlet. it can't be larger than stock. kevin elliott confirmed for me that you can remove the snorkel, but under the inlet, so that you don't increase the diameter. in other words, you'd have to remove the snorkel in pieces but start a little bit below the inlet.
one other thing...i'm not advocating cheating in any way, but ccs will generally only check your airbox if you finish on the podium.
I *think* the problem there was that the "on track" winner, on a Buell XB9/12(?), had NO air filter at all. I believe it was an oversight by the rider/crew because he usually ran superbike classes without the filter. CCS always checks the filters in SS classes-top 3-5 finishers that is.
I think that I will take the lower air flow on my oiled filter. As an amatuer, I don't think the K&N oil is really making a difference in my speed. I'd rather have a longer lasting engine rather than being .005 faster.