I decided to just post this follow up in case anyone was having a mystery air bubble problem. Mine turned out to be a blown head gasket. This was apparent by the sludge on the oil fill cap and also by the cooling system overpressure after about 30 seconds of idling with the car still cold. One morning i started it up and moved it out of the garage. i cut the car off and removed the rad cap. The coolant gushed out like a geyser. My fan was not turning on because the exhaust gasses were creating an air bubble which would migrate to the radiator. The coolant level would go down past the fan switch and not turn it on.
Anyway I removed the head and took it to Scott's machine shop in Fayettvile Ga. He measured it and found it to be .010 warped. He checked for cracks too. I had him mill it and I used the gasket kit from pelican to re-assemble the engine. I bleed the system again and test drove it today. So far everything is fixed. No overpressure, no overheating and the aux fan comes on when its supposed to. Also worth noting, The #2 piston was clean while #s 1,3,and4 were coated in carbon. I assume the #2 was "steamed" when the car was shut off while hot. This might be yet another way to diagnose a cracked head or blown HG. I think I'm under $500 total on the head gasket job.