If you have coolant/water in the oil pan you have a problem. You can have a number of issues, a possible blown head gasket, a cracked head, or intake manifold gasket is leaking into the motor. This can give you a chocolate milkshake color and consistency in your oil pan. You do have various options to repair or scrap it, it all comes down to the true source of your problem and how you want to spend your money. I do not recommend you continue to drive this vehicle.
Water mixed with oil will turn the oil into a milky color. There should never be any water mixed with your oil. This would indicate a problem and will soon cause more major problems. If you suspect water in your oil, I suggest bringing your vehicle in to a qualified technician as soon as possible.
〉 Answered on Apr 8th, 2008 by Suzanne Grego, Technician at City of Philadelphia Fleet Management