New to me 1987 XJ6. Dip stick looked fine, but looking in the oil fill cap, I saw what appeared to be cloudy, green/yellow-tinted oil, so I thought "probably head gasket." However, I've run it up at idle with some revving for 10-15 minutes, and it seems to maintain temperature, I'm not seeing any bubbles in the coolant reservoir, and the combustion gas detector I borrowed from AZ is not detecting any gases. The car exhaust did blow what might have been white and blue smoke briefly, but that seemed to normalize as the car heated up.

As best I can tell the car did sit for roughly two years. Is it plausible that condensation is causing the oil's milky appearance, and immediate action is not needed? I'm planning to change the oil and filter tomorrow, and maybe drive it a bit to see what happens. I'm looking for a functioning driver and am fine with "good enough" as opposed to "perfect". The attached picture shows the oil in question...I have ordered a stake down kit and plan to do that either way.

 

That is water in the oil. I'd change it immediately before running the engine any more, as that is well on the way to being an emulsion and it has very little lubricating qualities. Drain as much as you can, you might need to leave the drain plug out for a while and change the filter.

After you have filled with fresh oil keep an eye on it and if possible take it for a longer drive to get the oil truly hot and plan for a second oil change if the oil is not coming up clean and golden. There is a limited amount of water that the oil can tolerate before the lubricating qualities are compromised. Getting the oil hot will drive off free water from the byproducts of combustion, but it won't break the emulsion. You have to get all that out of the engine.

Keep an eagle eye on the coolant level too, and make sure it is stable. Sounds like the headgasket is ok if you're not seeing combustion gasses in the coolant.

 

Another place for water to get into the oil system is via the timing cover on which the water pump is mounted.
If the area to the rear of the water pump gets corroded badly it will let water into the oil system.
You won't see any exhaust gases in the coolant system.

That blue and white smoke on startup is pretty normal on XK engines indicating worn valve seals but is nothing to get excited about.