Is this very dirty?

[JohnL]

Woah, if its out, why dont you just take it apart and clean it. Better now than in the car. Change the seals in the process as well. I think the worse thing to happen is the oil pickup get clogged with the sludge...

If time wasn't an issue then that's what I'd do as well. While it was apart I'd be thinking about having the bores honed and new rings fitted, or at the very least thoroughly clean the rings and the ring grooves. Actually, it would be madness not to check and measure everything while it was apart...

That reminds me, can sludge build up if the engine hasnt been used for awhile.

The sludge is 'made' in use through heat and chemical reactions with combustion products etc, so if the engine isn't being used...