^ As above - a 2007 D40 doesn't have a flow sensor in the EGR valve. Block it and you're good to go.
Blow-by is also exhaust gas but because it's coming from the sump, the diesel soot is mostly caught by the sump oil and the sump oil is vaporised from the heat (remember, blow-by is the burning diesel pushing past the piston rings) causing the oil mist that condenses in your intercooler/intake. This is also why diesel engine oil turns black quickly (and turns black even faster when your EGR valve is working). Blow-by is vented at the top of the motor through what is referred to as the Positive Crankvase Ventilation outlet - commonly known as the PCV.
So while EGR and PCV are quite separate, they are both from the exhaust and both are being fed back into the intake.
It's a little like smelling your own farts, except in the engine's case, they plumb a hose directly from the outlet to the inlet!