This works easily when using slower lenses such as f. 4 and f 5.6 glass. however I did run into a lot of problems when trying to use my fast old Nikon lenses.
The images would become a huge blur of light and flare.
After playing a little with this it turns out the the solution is a very simple black baffle at the end of the lens.
Photographed with Olympus E3 and 50mm 1.4 AF Nikkor of 1990 vintage. using fast older lenses on your Leica, Panasonic or Olympus 4:3 system camera is a easy and inexpensive ticket to fun with seriously de-focus. The 50mm act as a 100mm 1.4 and is a great cheap portrait lens.
Olympus, Leica and Panasonic 4:3 lenses all have a exit lens diameter of about 25mm which fits nicely with the cameras mirror-box, remember lenses made for fullframe film cameras was made for a HUGE mirror-box.
The solution, well at least part of the solution, is inserting a baffle, in the path of the light, to prevent some of the light which is aimed at the side of the mirror-box from bouncing back and creating flare in the image.
Check the illustration to the right, the light from a 4:3 system lens leaving the exit lens, fits in the mirror-box is designed to render in the area of the digital sensor and not on a much larger area of a 35mm film.
Take a look at the Nikon lens, it was designed to fit light through a much larger mirror-box, so a large amount of light which should be hitting the film end up bouncing around in the system, this creates significant damage to image contrast.
A contributing factor is the space between the lens and the box which give some space for this light to get in trouble.
Clearly this is not entirely scientifically accurate, but its give a pretty good idea about what is going on with this problem. The idea solution naturally is to redesign the lens to have a exit diameter of 25mm and light directed at the correct sensor size, with the famous Olympus straight in design for better digital photography. However the alternative solution is to cut out some of the light we do not want or need in the 4:3 digital camera.
This is where the baffle comes in to play. If you look in a long tele lens you can see cut out baffles in the barrel to control stray light. So I figured that cutting a baffle and putting it as close to my lens as possible would cut the stray light in the mirror-box.
You can use any piece of really black paper, cut it and stick it to the back of your 43 system adapter with a little double side tape. do not attach it to the glass of your lens. Try a before and after shot and see for youself.
Again, this only applies to shooting wide-open, stopping down your lens to something like aperature 4 or 5.6 will constrict the light path and prevent most bouncing in the mirror-box.
The same baffle made my old 300mm f4.0 work wonderfully.