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O2 sensor and Beige stuff in the dipstick tube S90-V90 1997

Yesterday I was under the hood of my wifes car and poking around found lots of creamy beige stuff on the dipstick again. After taking the dipstick in and out a few times, wiping it off each time, I managed to get most of the gunk off and saw that the oil looked good. After starting the engine, I pulled the dipstick out and saw a good stream of smoke coming out. Now I'm starting to figure that this is the source of the gunk. Question is why is it coming out here? Where is the pcv valve on this motor since the crankcase pressure should be relieved though that valve and not through the dipstick.

Second question. Using my nifty 88 buck code scanning/analyzer program, I can see that the #1 O2 sensor is functioning normally, showing a sort of sine wave curve but that the #2 sensor is flat. One of the other screens also now shows it as a fault. Where is this sensor located and does anyone know approximate cost? Engine seems to be running well all told specially since it just went over 166k. Thanks in advance for any help.
--
97 S90 with 166K miles still going strong






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