Yes! It was the pellets! They are brown and when they mix into the coolant they turn into a brown substance. I was not aware that the bar's contained oil in it. My oil level has not dropped. However the fluid on the side by the oil filter appears to be oil. I replaced my valve cover about a month or 2 ago. No signs of oil leaking from the vc. So I'm guessing head gasket??

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1990 190E 3.0L