foamy oil problem (long)

[Ben Klumper]

I'm having a strange problem with my oil. A few of you may have seen my posts on other forums, but for those who haven't, here it is:
I just finished installing a 3B engine in my Coupe Quattro. The engine came from a wreck but ran fine and had very low miles. I tore the engine down completely (except for the crank and pistons) and installed all new seals, gaskets, hoses, etc. so the engine is virtually like new. However, last weekend I started it up for the first time and I immediately got the oil pressure warning light in the autocheck display. So I shut down the engine and checked the oil and it was kind of foamy and frothy. Not at all like when coolant mixes with oil, as in the case of a blown head gasket, but kind of a translucent froth. Upon closer inspection, I could see the oil was full of tiny air bubbles! So I left it for a couple of days, thinking that it may have been an over-filled oil situation and that the oil just needed to be circulated so it wasn't all sitting in the bottom of the pan. So I checked the oil a few days later and it was completely normal and showing the correct level. Attempted to start it up again, and the same thing happened. I'm at a bit of a loss now as to how to go about diagnosing and fixing this problem. I certainly do not want to run the engine in this condition until I figure it out. I'm hoping someone on this list has maybe experienced the same or similar problem. Here's a few more bits of info to try to narrow it down:

- the oil temp sender and pressure senders were never removed during the rebuild, so I can rule out incorrect installation of these components.
- the oil pump appeared to be in good working order and was fully engaged with the crank shaft when reinstalled. A new gasket was installed as well.
- The oil pick up/suction tube appeared to be in good shape and was installed with new gaskets.
- I installed the AAN windage tray and a second oil pan gasket. However, I also left the plastic baffle (stock 3B) in the pan as well. It doesn't physically interfere, so I left it in. Should this have come out?
- A metal head gasket was also installed.
- I did all the work my self, so I am very familiar with how everything was put back together and which parts are new, etc.

To me, it looks like air is somehow getting into the lubrication system. But how and where? That's about all I can think of right now.

Thanks in advance for your insight!

Ben