Surely your oil is contaminated with something...on a new engine, water-contaminated oil will be more gray than milky brown, so I'd be careful about the RPM's until you get it figured out.

As the post above says, it may just be from assembly lube, but you may also have a gasket leaking water into your oil.

You can try the following:

Set up a cooling system pressure test to see if any gaskets are leaking. Start with a cold engine and continue your pressure test until the engine is up to full operating temperature.

There are a few situations you may see in the course of your test: Ideally the pressure will hold fairly steady, maybe climbing a little as the engine heats up. You may also note that the pressure builds very quickly, which may indicate a head gasket leaking compressed gas into the cooling system. When you have this type of leak, the engine will suck water from the cooling system as it cools down. Of course a falling pressure indicates a serious leak somewhere, and you should find that you've lost coolant when you check the radiator tank.

If the pressure holds steady and you don't lose any coolant you're probably OK. Drain the funny-looking oil and install a new filter. Run it a few hours and do it again.

Keep the ROM's down until you're sure you don't have a problem.

Hopefully (fingers crossed) you have no problem at all!

Good luck, and let us kow what you find.

Steve, SoCal