Son of a.....

I just rebuilt my 76 caddy 500 engine, put everything together and ran it for a couple of hours and I went to check my oil and it was sorta milky and it smelled like gas. The engine seems to be running perfectly. Oil psi is good, temps hold steady at 180, compression is good on all cylinders.

What could possibly cause this?????

I wonder if my new fuel pump is hosed up?

Could it be the rings were not seated properly? I did have trouble starting it initially and I did flood the engine before I got the timing right but this is my second oil change and it is still doing it.

Any thoughts?

If it's a mechanical pump, it may have an internal leak, leaking fuel into the engine. I doubt flooding it while starting would cause that much fuel to get into the oil!

It is a mechanical pump, brand new.
I'll replace it, they are pretty cheap.
It had an little overflow nipple that I capped off, do you think that might be the culprit?
Should I have not capped the overflow?

that so called nipple you capped off is probably the excess pressure fuel return line back to the tank and by capping it off means too much fuel is forced into the carb and causing it to flood somewhat.just a thought

That makes sense, I'll reroute the line back to the tank and try it.
The old fuel pump I had replaced was capped so I assumed it was supposed to be that way. Thanks for the input guys.