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I have had oil go into the coolant and not the other way, at least noticeably. You've got something in the coolant causing it to foam. Oil likely, but do as Poncho says and drain it, flush it, fill it with water and try again...maybe it's just oily stuff that was in the coolant passages and needs to be cleaned out.

When I have had head cracks or head gasket leaks...it also showed up in a fouled spark plug or two adjacent ones. Check your plugs for coolant fouling. That might tell you which side it's on. Often times with a head gasket leak, the radiator will burp the excess pressure coming from the cylinder leaking past the head gasket and into the coolant system. If you just have the overflow hose hanging like original...you can put it in a jug of water and see if it burbs. It will naturally burb some as it warms up, but a gasket problem will be more constant when at running temps.

Does your "blue smoke" smell like burn antifreeze?
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