Drained my Davco to change filter and got this???

Just curious, how often have you been adding coolant to the reservoir and how much?

 

The coolant is red , heavier than diesel comes in close proximity to fuel around injectors, and right in Davco but i doubt it could mix together there. I don't know if could be power steering fluid , Dexron 3 is reddish also , the tandem pump fuel/power steering are concentric, fuel pump sitting on top of power steering pump, powered by same gear, coupling shaft there's a gasket in between.
Drain the diesel slowly from that jar, leave the red liquid only and check it, compare color consistence it with your coolant which is sticky and steering fluid more oily,

 

You can see the separation line from coolant to Diesel, Steering fluid would dissolve in the fuel as it is also oil based giving all of the fuel a red tint.

 

Good point, i was wrong above.

 

Does the Davco has 2 coolant lines going on the bottom?

 

I had one leaking on mine 2005 vnl.
I looped the coolant line on the truck and left the plugs on the Davco open, after couple hours i had a diesel leaking from those ports, i went to home deport got two pipe caps and screw them in with Teflon tape, drove like this for 4 years with no problems.

 

I have only ever seen one, but it is possible. Drain the bowl empty and dry, put a pressure tester on the cooling system and let it set overnight.

Davco does service parts on their units. You can replace just the heater tube.