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Sludge often forms when the flow of oil is restricted or nonexistent. The areas that you are looking at don't have much oil flow. Occasional splashing is probably the most that they see so you get the build up that you are finding. What you have is not particularly encouraging but not an automatic condemnation.
Even if there was light sludge when you bought the car your consistent oil change routine may have cleaned it up for you already. However, like Toyomoho mentioned, until you open it up and look you won't know for sure. It will cost you the price of a valve cover gasket and spark plug tube gaskets. (You can try to reuse the old ones but keep an eye on the area for "new" oil leaks and if there are replace the gaskets then. If you're having a mechanic do the work he'll use new gaskets to make sure that you don't bring it in later with a complaint. It's also cheaper than his time.)
Kep
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Often, it's the loose screw between the steering wheel and the driver's seat that needs to be fixed first!
Stock 1995 Camry, 5SFE, Sedan.
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