I know this isn't a 1st gen. but I have been a part of this community for some time and know ya'll are very knowledgeable. I've got a '96 CTD. I bought the truck from a small used car dealer in Northern Alabama June 8 and have been trying to figure this thing out since about 3 weeks after the purchase. I'm getting water in the oil. There is NO oil in the water. I have replaced the oil cooler and resealed it a second time to see if maybe it was a bad seal, NOPE! I just pulled the head to check the head gasket and the gasket that is on it is quite new and no signs of damage. The head is at a reputable machine shop being checked. I'll hear something later today I'm sure. If the head is good where would I go next? Aside from a lawyer. I'm already talking to one a little. Any and all tips would be greatly appreciated.

 

Sooo, is it water or coolant? If it is the latter, and there is no oil in the coolant I'd be looking for a leak into the crank case, as in low or no oil pressure environment.

As far as lawyer, some customers of discount tire held them responsible for transmission damage alledgedly resulting from installing larger-than-stock tires...you may want that guy...
cheers,
Douglas