Removed timing cover to try and find the reason I’m still getting milky oil and discovered a hole in the timing cover! Would this be my source why I’m getting milky oil???
No, that is not a cause for your milky oil and as far as that corrosion goes the cover is suitable for continued use. That hole is common and the water just fills a dead cavity in the front of the cyliner block.
Your milky oil could be a lot of things, including even simple collection of condensation that needs to be boiled off.
More often than not, water can leak into the lifter valley by way of pushing past the intake manifold gaskets during high water pressure (induced by a jet pump in a jet boat engine's cooling system). There are other possibilities, but check there first.
