So here is where I stand. I had milky oil in coolant when the truck overheated. I figured it was blown head gasket or possible cracked head. I stripped it down, replaced gasket had heads checked and all back together. I have filled it back up with water to flush the system, ran it, drained it and done it again. The first time it began over heating (which I assume was residual oil), and the second time it didn't. I left it overnight and came back out to drain it again and quite a bit of sludge was still in the bottom of the radiator.

So questions, is this just going to take a bit to flush all this junk out?
Could I have some cross contamination elsewhere?
If so what's the best way to check contamination from the oil cooler?

I don't think it's transmission cooler, no slipping and transmission oil seems fine.

 

Was there a problem with the heads or head gaskets? I would put my money on the trans cooler. You should bypass the tranny cooler in the radiator anyway. So that would be your next step in diagnosing your issue.

 

I had this issue in my H3, the radiator failed internally causing tranmission fluid to mix into the coolant making it look milky as you described. I preemptively bypassed this design on my H2 with an external tranny cooler