96 Pete with 3406b oil in water.

Oil cooler.

 

This happened to my 3406 last year.. started seeing oil in the coolant, then one morning it was mud in the coolant there was so much oil in it. I was worried it was the head also, but all the old timers said it was the cooler and sure enough that's what it was. Changed cooler, flushed the radiator and block with dishwasher soap ten times and I was back on the road. The oil cooler seems to be the first thing everyone changes when oil starts showing up in the coolant.

 

Oil/Water heat-exchange oil-cooler =/= good thing in a HD/hi-perf application

 

98% of the time it will be the Cooler that will get a leak in it as that is where you can get a Pinhole in a line and Bang your mixing Coolant and oil real quick. Also if it was a head he would have been down on Power or showing an Oil Leak someplace or Blowing Smoke on most Kitties Especially the B Model when they lost a head Gasket. Also if they crack a Head your going to know it Right now as they will lose Power and start Smoking Worse than Steam Engine that is Dumping Sand into its Firebox to clean its FLUES OUT.

 

With a 96 your more than likely facing Sludge in the Bottom of the Radiator and leaking Intercooler which will cause some extra heat in the Coolant also.

 

Did you flush the cooling system at all??? Sometimes you can do that for 8 hrs and still not get it all out.