I have another thread going now about a possible blown head gasket. I'm loosing coolant and trying to find the problem. The Jeep is running excellent, and the oil on dipstick is clean and when I change it, it's clean. But I'm finding milky oil on the oil cap when I take it off. Is that because of condensation? Has anyone ever seen this?
When there is moisture in the hot oil some of it will turn to steam and go out with the blowby. On the way out the steam coats things like the inside of the valve covers and the bottom of the filler cap. When it mixes with oil it turns a milky color. So yes, milky colored oil on the bottom of the filler cap indicates the presence some amount of water in the crankcase steaming out with the blowby.
If it's been extremely humid outside I suppose there is a possibility you could get a bit of milky deposit on a few things, but more than likely it is an indication of something worse.
I would get ready for a new head if I were you, especially seeing you have a 2000. We have high humidity here in Houston year round and I never get milky oil on my cap. Since you only have a little water in your oil, your head has just started to crack.
in addition to looking for milky oil, check the coolant resevoir as well. when my head gasket started to go i started to see "goop" in the bottom of the coolant resevoir. the goop was oil obviously...that was the first indication I saw of the gasket failing.
If you losing coolant then I would pressurize the cooling system and find out where it is leaking internal or external of the engine. A oil analysis will also tell you if you have coolant in the oil.
If you are in a cold damp climate, then milky color on the cap may just be condensation.
I had the system pressurized and they found no leaks. They pressurized the radiator, and fill bottle, and found nothing. I get milky gunk on oil cap. I'm in Long Island NY, by the way. No gunk in fill bottle. Dip stick is clean. Jeep runs fantastic. Doesn't overheat unless running low on coolant. I did do the block test today with OEM block tester and it turned yellow both times. I'm probably going to have to get the head gasket repaired.
I had a leaking head gasket and found a gunky material on the cap as well as in the oil filter. Had gasket replaced and no more gunk and just a drop of clear moisture in the cap after a week of slow runs of 45 miles. I do trust it is condensation.