I have never been able to tell when the filter element in my MotorGuard needs to be changed. I have seen where water will start spitting out my DA, but this is just at the extreme of the filter life, granted, this is my non-painting air hose connection for general tools, but I will run my DA off it from time to time.
I just try to rotate the filter elements and let the used one dry in a cabinet for months.
For my paint booth air connection I have a so-called five stage desiccant drying system. This is my take on a desiccant system in a non production shop environment.
I have a valve I close whenever I don't use this system for painting. I have copper that goes strait back to the compressor tank that, obviously, sees the small amount of water in my whole piping system and compressor tank. The desiccant never stops working, so it will try to absorb any water it sees so I shut the desiccant off from the water.
I don't think the physical location of your desiccant filter will make any difference.