Sludge in coolant

If there is sludge in your coolant there are a couple things to check here. Try to figure out if it is engine oil or transmission fluid. It can be either, if it is transmission fluid then it is a broken cooler line in radiator if not have it pressure checked for a blown head gasket or intake gasket. If you see a sludgy/whitish buildup under oil cap then you probably have a head gasket problem or crack in head/engine block. More likely a head gasket however.

It also could be Dexcool gone bad. That turns into a red clay.

I kind of doubt it, that should have been done when gaskets were replaced. Pressure check it first.