[Vwdiesel] Oil is in my cooling system water

[LBaird119 at aol.com]

  Odds are heavily in favor of it just being the head gasket.  The oil 
containment of the head gasket is sort of a "drop" shaped seal 
around one head bolt.  The metal ringed ones generally don't 
leak.  The pliable seal type (most common and I've never found 
a way to specify one or the other) sometimes break loose from 
the gasket and become "kidney" shaped.  It may have simply 
happened from age or it may have gotten a bit hot.  You really 
don't know.  Either way oil in the coolant isn't what you want 
happening so you need a new head gasket.  
  Always check these heads for flatness when they're off.  You're 
only allow .002" warpage and yes they CAN be surfaced or straightened.
     Loren