So after replacing my Water Pump, Radiator, Thermostat and some other things I went for a test drive. When I got back.... I started to smell burnt oil. Here is where it was coming from. (This is a 7MGE)
So I dug into it further and the cause was a bad/broken Crank Case Cover/Gasket. This is the piece in the below picture that covers the entire area (Green Arrows).
The oil/water mixture (Milkshake) was because not only did this barrier fail to keep water out of the galleys, but it also serves the purpose of a gasket to the 14mm plugs shown in the yellow circles. In my case this was the cause. In your case, remove your valve covers and check for the same type mixture. If oil is clean... your good. If it isn't, start checking for cracks, or you have a major mechanical issue.
So I started to tear it down: (Some of these pics are pretty ugly.....)
Rip this out and throw it away (below)
Find yourself a good helper to hand you shop towels and throw stuff in the garbage from the cleanup:
Cleanup time: I personally used a wet/dry shopvac. Then I used superclean to clean out the valleys. I have also heard people use superclean and pressure washer.... I just couldn't with my mess.... it would of made a HUGE mess....
So now onto the plugs. DO NOT go buy a new cover. This will just happen again. First remove the plugs and inspect for remains of the gasket:
Remove any remnants of the old gasket and clean the entire plug.
Go to your local autoparts store and get some rubber O rings that. I went to O'Reilly's and got Part #Nat-116.