I bought and 307 with a th350 out of a 78 el camino but the motor and tranny was from a 72 nova. I checked it all out no air bubbles in radiator, no blow-by in either valve cover. I took the driver side valve cover off to get the head number and it all seems fine. The motor had a lot of power, tranny wasn't slipping, no carbon built up on the inside the motor, the oil was black no anti freeze, and no smoke at all. Okay, I was putting it in my car and I open up the passenger side valve cover and at the top it was all filled with water/oil, milky look. There was also a little oil/water on the head but not that much maybe a two nickles size. I was putting the water pump on today and it was raining like hell. I think I got some water in the engine today,the oil now is milky looking. I was just wondering what you guys think? Do a oil change and hope for the best? I also hook up a vacuum gauge and it looked perfected steady needle.

Seems like all you can do is change the oil and hope.

But I believe it would take more than a little rain to turn the oil milky.

the bad could be a cracked cylinder head
the good would be condensation

Yea that's what I thought but when I was driving that El Camino I check the oil twice and it was black no milky in it at all. Now that I remember I had a water hose that goes into the intake manifold didn't have the hose clamp on it so it was leak pretty good. The water was on top of the intake and valve cover maybe the valve cover gasket is bad and water leaking into through the valve cover / head. The water in the radiator was still clear. I'll do oil change on Monday and I'll see if it fixes the problem.

The whole valve cover on top was completely filled with milky oil. You think one year will cause that, oh on that side is where the PCV is.

That little 307 with an airgap intake, holley 600 cfm carb and 100 shot of nitrous will put that camaro into the low 13's.