My 1998 A4 2.4 with 60000 ks has developed a problem with oil appearing in the expansion bottle.

What tests should be carried out to determine where this oil may be comming from and in what order should these tests be carried out in

Ther compression test done before I purchased the car 5000 ks ago had all cylinders showing good compressions all reading 90

is this oil a sign that perhaps I have a cylinder gasket or head problem.

Thanks for any help offered

Ron

 

Typically when you have a bad head gasket or a warped cylinder head you will burn water resulting in a white puffy cloud out of the exhaist pipes. That is because water finds its way inside the engine. I have never seen the other way around, oil in the water.
Check your oil and see if it is emulsifying, and indication that you indeed have a head gasket problem. If you do, don't drive the car. Water is a very poor lubricant and you will seriously dammage the engine.