Jebus. My friend and I took apart a junked Oldsmobile 403 after we pulled it out of the firebird it was in and the oil looked like that. I pulled the drainplug and all that came out for 30 seconds was water. Then this muddy, sludgy oil start plopping out.

Surprisingly the insides were free of any corrosion.

You could try Auto-RX, some sort of oil additive/ sludge cleaner I have heard good things about.

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1985 CA 300D Turbo , 213K mi