Yeah that's what I was thinking to.  There is nowhere for the oil to go so it found a space.

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The headers are not cold all the time I know that.  They have burned me.  I need to double check what rpm the water starts coming out of the headers too.  I have never replaced the time valve since owning the boat.  Where do they mount the secondary water valve?

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The second or manual control valve is mounted up by the drivers seat usually between your legs on the stringer.  You shouldn't have any water in the headers below 1500 rpm , this is where problems start. 
What do you have for crankcase  ventilation?  You don't want any pressure in the crankcase if at all possible.  You maybe experiencing normal condensation if your only seeing the milky oil on the top of the dipstick and at the base of the distributor.  Heat from the oil starts burning the moisture out of it and it will leave milky streaks by places it's venting from when it starts to cool back down.  Pan evac tubes to the headers or just adding suitable breathers to both valve covers may get rid of this problem.   I get that same milky oil in my puke tank on my motor, but that's kind of what a puke tank's for.

Here's the type of valve most guy's run by their seat,
http://www.cpperformance.com/p-13241-polished-billet-exhaust-header-water-control-valve.aspx

I think a few of us will be going out to Elsinore on Saturday if you could use some help.

No worries we are close so some time soon just send a PM and we will see what we could do.