Why is there a White milky sludge on my oil cap?

whenever water is mixed with oil in a crankcase the heat turns the water into a vapor and this allows oil and water to mix and that is the milky looking substance you see... check for cracks or bad gaskets if the motor is water cooled and buy a dryer agent if it's not... it could be just condensation but enough of that will damage your motor real bad... it lowers the viscosity of the oil and that can lead to big problems!