I don't see a huge problem Jim, my car looks like that and it runs perfectly. I don't know how there could be sludge in a one-owner dealer-serviced car but there is some sludging in mine. Not my doing and it doesn't seem to be a problem so I just drive it. I never skip an oil change with Mobil 1 and it never skips a beat. I'm amazed at how filthy and ugly the engine in my car is considering how well it runs. Oh well.

__________________
'02 BMW 325i
'85 300D 450k
'93 190E 2.6 170k(killed by tree)
'08 Ducati Hypermotard 1100S 6k
'06 Ducati S2R800 14k(sold)