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Condensation in Oil /ABS 850 1994

I purchased this 850 wagon at a great price, however I knew there were issues
when I purchased it. There is definitely condensation in the oil - a chocolate
milk frothy residue on the dipstick. On top of that, there is evidence of oil
leakage from the dipstick where it meets the tube. I figured clogged flame
trap. Well, after I bought the car I took the intake hose off etc, and checked
the flame trap - it was missing - this is not an 850 turbo, it's a na 850.
I put in a new flame trap, cleaned the nipple, checked the vacuum hose, it
all seems to be in working order. I also checked to make sure there was
no restriction from the flame trap to the crankcase, it was OK
I asked the previous owner if it was using coolant, they said absoulutely not.
If you pull the dipstick while the car is running you can see water vapor
coming out - it's gotta be getting in there somehow. There is no evidence
of oil mixing with the coolant in the reservoir tank.

My plan is to change out the oil and filter, take it for a long run
and see what happens (all the while watching the coolant level
like a hawk) Hopefully it's not a cracked head or block.
My main concern with the positive crankcase pressure is blowing
out the rear main seal - what else could cause water vapor entering
and/or excessive crankcase pressure?

Part 2 - I also have a set check engine code. It is 4-2-2 on the ABS
rear return valve circuit, open/short any ideas?

It's gonna be a great car once these issues get cleared up.
Many Thanks!






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