Sludge under valve cover 20V Blacktop, is this a bad sign Options

[onnaj]

Hello,

I bought myself a 20V Blacktop yesterday and today we decided to strip the engine and take the cam cover off.
Under the cam cover we saw sludge sludge and sludge all over. The bearings and cams seems to be okay, but i'm afraid to take the head off
What do you guys think? Return the engine or just check the bottom and when there's no damage to the pistons, rings, cylinders, etc keep the engine?
The oil filter looks very clear, so that could mean two things. 1) The bottom is good and no sludge over there or 2) (I don't hope so) the oil passage is blocked.

Well...here are the pics:

Engine complete:


Cam cover itself:


Underneath the cam cover:








Tomorrow we are going to put the starter and brackter back on and check compression. I think this is possible isn't it? Valves are closed now and inlet/outlet is open and plugs are out. Should've done that right away. before stripping it :S

[Syaoran]

Years of pure negligence.... that's like oil poo.

Should i worry for the rest? It was an A/T AE111 by the way. Don't know if that may worsen sludge comparing to m/t?

Transmission type is completely unrelated to engine conditions. This is a case of bad maintenance.

that can either be from poor oil maintenance, bad oil pump, together with clogged passageways

Simply put there was an obvious skimp on maintenance on this engine.

@OP: Your best bet would be to get it flushed before using it, be it with an engine flush product or at a machine shop. I'd go with the machine shop if you have the money, but it shouldn't be too much to clean up an engine.