Agreed, The reason that the steam goes away when you rev it motor up is because you are gettng a measurable vacuum on the crankcase. At an idle you pretty much have none. An engine doesn't suck air into itself. The 14.5 psi of atmospheric pressure forces itself in the engine. When you are running at higher rpm's, you have enough cfm moving through the intake that you will get some vacuum on the crankcase. If you have a blowby problem you will know it. Also your cylinders will have some blow by, rings do have a gap. If it's one specific cyl. it will be rythmic. If you are are smoking at the exhaust more then you should or a little "miss" you may want to replace the nozzles. They could be erroded some and not atomizing the fuel right which will not let it combust completely.

As far a "sludge" several things can cause this, Dirty air filter, bad nozzles, and a big one is an engine running to cool. You what your engine running at 200 to 210. If your oil is cooler then this the water in the crankcase can't be vaporized out plus the sulfer in the fuel mixes with it and makes sulfuric acid. Water comes from humidity and it is an emission from the engine, You have seen water running out of exhaust pipes before. This is a big reason for an oil "cooler" on a diesel. It's first job when you start it up is to get the oil hot as fast as it can.

I don't disagree with the other guys but I would pull off a valve cover. If you have a sludge problem you will see it. If you do then flush it if you want. If you have alot of soot then you have may have a fuel problem or the oil isn't changed enough. A bad nozzle can cause this. Using some oil is ok. If any of my engine's quit using oil then I start looking for fuel in it. That is bad. Hope this my help clear up anything you weren't aware of. Good luck with your brakes.