I doubt it is the head gasket but you never know. I just changed the oil and it looked normal. I will check the weep hole on the water pump. I have added straight coolant sometimes so the ratio is close. The glycol does not evaporate so normal topping off of the coolant should just need water unless there is a leak which sounds like my problem.

After I check the weep hole, I might drain the system and do a pressure test and change the thermostat.

Can someone confirm the vent tube on the reservoir is suppose to be open and hang down underneath it?

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85 300D Turbo

Yes that is correct, and if you see evidence that coolant is escaping through that hose (without overheating) you need to replace you cap.