Volkswagen: Sludge in crank case, worst case scenario, crank case

Question
I changed oil today on my 97 jetta 2.o liter (175000 miles) and noticed a grey sludge around the inside top of the crank case and on the underside of the oil cap.  I could run my finger along the underside by the fill cap and scoop this sludge off.  What could be causing that?

Thanks
Todd

Answer
Hi Todd,

Gray sludge is usually a sign of water.  This could be caused by something as simple as a dirty PCV valve and infrequent oil changes.

The worst case scenario would be a leaking headgasket.  This can usually be detected by white exhaust smoke while accelerating and oil residue in the antifreeze.

Ron