Oil dribble into the coolant in a bad head gasket most of the time. I'm watching mine (on a trip to Florida this week) to see if it is still collecting or just left over from when the rad blew (new rad when I got the car).
If Block Sealant fixed the oil leak, the gasket sealed enough to prevent the oil leak, but is now to the stage you need a new gasket.
I've heard the Elring gasket is a problem, use the other suppiers (name forgotten at the moment!)
The original head was a problem -- warped even in normal use, and cracked when overheated, sometimes without overheating. Replacement is MUCH better -- all rebuilt motors come with new head.
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!