Anthony - Could be the milky oil is from condensation from sitting and/or overdue oil change. Try loosening the drain plug and draining a cup or so of oil into a glass container. Only if you see water along with the oil, or the oil is again milky-looking oil does it mean there may be a problem. Otherwise I wouldn't worry about it.
Running hot is likely from a plugged radiator or possibly a stuck thermostat. My experience however has been thermostats tend to stick OPEN which makes the engine run cold.
Another long shot possibility is the water pump driver (the odd spring 'n bolt gizmo on the front of the fan hub) has become disconnected or has gone missing so the water pump is not working.
I would drain and flush the cooling system. Before take a close look at the bottom of the upper radiator tank. If the tubes are loaded with gunk the radiator is gonna need to be removed and professionally cooked out.
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Today's Featured Article - Oil Bath Air Filters - by Chris Pratt. Some of us grew up thinking that an air filter was a paper thing that allowed air to pass while trapping dirt particles of a particles of a certain size. What a surprise to open up your first old tractor's air filter case and find a can that appears to be filled with the scrap metal swept from around a machine shop metal lathe. To top that off, you have a cup with oil in it ("why would you want to lubricate your carburetor?"). On closer examination (and some reading in a AC D-14 service manual), I found out that this is a pretty ingenious method of cleaning the air in the tractor's intake tract.
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