Can I volunteer to work with my Masters thesis advisor, when I am funded by different advisor for PhD I completed my master's dissertation with an adviser and was interested in the PhD program. Unfortunately I was told that my master's adviser didn't have funding and the other professor in department was doing an interesting research about an emerging field and he agreed to fund my PhD for next 4 years. He is aware that my previous lab let me go because of funding issues. Research in my previous lab and present lab are completely different, they are in no way related. 

Now I still have strong interest in my adviser's work partly because some of the projects were my ideas and I don't want others to end up implementing them and also research is significant enough to have a journal published on it (an important addition to my resume). They have time till August to finish them off and I estimate they require at least 2-3 hours of work a day. I was considering volunteering for my Master's adviser and finishing off those projects. Will it be OK if I volunteer in my personal time to try and finish them? Do students ever do this?
Your personal time is yours by definition. A good idea though might be to talk to your
Ph.D. advisor. If your former and current research projects do not overlap to much and you do not use results obtained in one lab and not yet published in the other lab I don't see any problem. Of course there may also be some personal animosity or rivalry between the former and current advisor so its a very good idea that your Ph.D. advisor is aware of this other activity and does not find out about it from a third party.