The oil filter by the way was extremely old and it was deteriorated. Could old cheapy thin oil do this? The oil filter shows a lack of oil changes.

If it is coolant in the oil, don't drive it much at all. Usually some of the milky stuff will be on the underside of the oil cap when coolant mixes with oil.
A car with that low of miles would be suspect for a head gasket failure. It sat a lot .

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Chris
84 280sl
82 300d euro