I would start with oil thermostats like the KE/Harden ones first to get your oil temp to 212 & burn off the moisture, after that you can adjust block temp if you still need to. Just my .o2

Oil temps can't be correct for the oil temp in the pan. He shouldn't need oil thermastats.

I would install the Tstats in the Spring and then see what the oil temps do. Ask Santa for a point & shoot temp reader.

ahhhh.... a point and shoot temp reader... nice....

One like this:
http://www.jegs.com/webapp/wcs/store...0002_389513_-1

Ok, so my question now is... WHERE should the oil temp be taken from? The pan?
and if so... with a trick little device like this... what should be the range I would like to see my oil temp in?

Thanks!

Yep those are what I was talking about. Sears sells them also. You want the oil temp to reach at least 212* at some point. Best place to take the reading is in the pan. I assume, since you don't have any milky oil that they are getting to 212*. Ideal oil temps from a warm idle to after a WOT run would be from around 180-230*