Definitely milky oil on the inside of the valve cover and oil cap, but I thought I saw some in the head as well. The lack of consistency with this issue is making me question myself. I'll put some new oil in and run it through and see how it turns out. Would be wonderful if it is not a bad head gasket.If it is getting into the head (or anywhere else for that matter) it will go straight to the bottom of the pan. Oil floats on water.
Was there actual water/coolant in the head...or just the milky oil on the inside of the valve cover?