Oil in Coolant Reservoir A Critical Issue for Vehicle Health

One tip, is to double check the oil cooler itself for trueness against a straight edge just to be sure that it is not slightly warped. Not ... Nope there is no place that oil and water intersect besides inside the engine. You're most likely going to find that's it's: #1 blown head gasket (semi common) The only thing that comes to mind, is if the new reservoir cap is not venting properly, it could allow the cooling system to over-pressurize. The reason is that oil floats on the coolant, so it would tend to wind up at the top of the radiator, and whatever's on top in the radiator, ... Engine oil in coolant! ... Yikes. Not a common issue. My suspicion would be head gasket. Did you buy this car from a dealer? ... That's bad! Transmission oil will float on the coolant and make it look dark, murky, and frothy in the coolant reservoir and the radiator. The coolant in a 5.3L Vortec does not communicate in any way with the intake manifold so a blown intake manifold gasket can not get oil into the coolant. The oil cooler is leaking oil in the cooler system which is a common problem and the recommendation is to replace the oil cooler. OP? You are describing the buildup that occurs on the relatively cool walls of the plastic surge tank. Called 'Phase Separation' it is the ... The oil always ends up in the overflow. It floats on the coolant, so it's the first to get pushed out into the expansion tank when the motor warms up.