When working in a stamping plant, a question was raised about oil on a press line and I didn't know how to respond. First, is there anything that can be done to effectively "fix" burnt oil, besides replacing the whole tank. Second, what causes an oil to be considered burnt, and what ill effects take place from using burnt oil.

What do you mean "burnt" oil?
Are you talking about the oil that is used to minimize dye wear during stamping? Which wouldn't make sense since consistently being replenished. If you are referring to the hydraulic fluid, a "burnt" smell is not unusual especially if ZDDP is used in the additive system. Do you have any other analytical data (AN, additive levels, patch test, etc.) that would support the need to replace/recondition the fluid? A truly burnt fluid is indicative of hot spots/dieseling and the resulting strong acids from the antiwear additives are quite corrosive and the particles from the hot spots can lead to filter/servo valves(other tight clearances)clogging.

Andrew,

I have worked in a forging plant where operations allowed the oil to overheat and get very hot, over 180 F. This was on a large hydraulic press with a 5,000 gallon reservoir. Here are some of the problems you can see. Varnishing of relief valves and spool valves, causing the valves to stick and malfunction, pitting of components due to an increased AN, damage to components due to a breakdown of viscosity of the oil, and others. From experience I can tell you the best thing to do would be to flush the system and replace the oil. Also, once you have drained the system, remove all covers and do a very thorough cleaning of the inside of the tank.
The effort may seem great, but it will definitely pay for itself in the end. Good luck