Hello! Thought that I would share my experience in regards of having MO, OBSE, and Steam play nicely, which they seem to do (for me, at least). I am utilizing Mod Organizer v1.3.11 and the latest OBSE files (v0021 and obse_loader; installed directly into the Oblivion directory). Followed GSDFan's advice for running Steam through MO (https://forum.step-project.com/topic/3560-obse-will-not-load-when-launching-with-mo/?p=59014), though I incorporated hishutup's suggestion of entering the directory path for Oblivion in the "Start In" field (https://forum.step-project.com/topic/3560-obse-will-not-load-when-launching-with-mo/?p=178155). Under MO's Workarounds, the load mechanism is set to use Mod Organizer and "Force-enable game files" is unchecked. MO is also managing the archives, and automatic archive invalidation has been selected for my profile. I also have the Steam overlay enabled for Oblivion. Running Steam from MO works, bringing up the Oblivion Launcher without issue (even the mods installed via MO are showing up and are enabled when I open "Data Files" in the launcher). The game started fine, indicating the Unofficial Patches have loaded (the only mods besides Blockhead that I have currently installed through MO). The OBSE plugin Blockhead seemed to be working, as well. Created a save, closed the game, and checked the save location (My Games/Oblivion/Saves) which had both .ess and .obse files associated with it. Besides setting the OBSE loader, Oblivion, and Oblivion Launcher to run as administrator, I believe these are all of the steps that I have taken to get MO, OBSE, and Steam to work together for me. Hope this helps!
Oops. Scratch that. As reported by many others, the OBSE plugins do not work when installed with MO and must be directly added in the Oblivion directory (been quite a while since I played Oblivion and forgot that the Blockhead error message that appears on the character's face during creation will show up if trying to utilize Oblivion Character Overhaul/Oblivion Character Overhaul v2... which I did not have installed at the time when I made my prior post). Other than that, seems to be working hunky dory. Many thanks to GSDFan, hishutup, and everyone else who have looked into this matter!