If you can find cheap blues, might as well decon them. I don't think there's a set chance of getting a dwarven oil from deconstructing a blue. I've gotten 3-4 in a row before, and I've also gotten 0 from deconstructing 3-4 blues before.

Random number generates numbers that are random.

Did they add the diminish returns on extraction like they said they did?
So extracting 100 blue items in one hr gives less then extracting 100 blue items over 4 hrs? Or was that just for refining (converting rare materials into processed)

I have no idea what the numbers are. But I would have to say that the numbers are the same for being gettign a blue resource to getting nothing at all when decon a blue item.

With max passive i think its like 75% (from my experience). Dwarven oil sell for like 350-400g so i wouldn't pay more than 300 for a blue itm.

75% chance on green/blue/purple. Buy any (non-wooden) blues at less than 200g, and any (non-wooden) purples at 500g or less.

Why not wooden? Because the demand for wood improving agents is far, far lower than cloth or metal improvers. This is because any one person can never wear/wield more than two wood items at a time (e.g. a shield in one wpn position, diff shield in wpn swap position). And at any given instant in time, you're wearing at most one wooden item.

If you're a woodworker, Pacrooti will send you all the wood improving agents you'll ever need.