thanks Lee & Klaus,
I gave a quick squirt of carb cleaner down the dip stick tube and that flushed it out, I hadnt wasnt even able to see the oil level before because of the crud! Then i checked it and the oil didnt look too bad, no water mixed in!

I had been planning to try the Auto-RX that i had seen mentioned here by klaus before, is it only available online? I thought i would do it after i replaced the pcv system in the next week or so. I can have my wife drive the car as she drives 25 miles each way to work. She actually has driven the car all but the last 5k miles of its 175k, so most of its life it has been warmed up fine ( she also drives it pretty hard) :)

Thanks, Bob