I've posted this a number of times on other forums but haven't really heard a definitive answer. Hoping the technical gurus here can help me. I have a 3B 20v turbo engine that I recently removed from a wrecked donor (engine ran fine at the time) and installed in my '91 coupe quattro. Before it was installed, I tore the engine down to the block (didn't touch internals) and refreshed it with new seals, gaskets, hoses, turbo oil lines, etc.
A few weeks ago I completed the install and fired it up. It starts fine and settles into a steady idle but almost immediately, I get the oil pressure warning light on the Autocheck system. So I shut it down (total run time about 90 seconds) and check the oil and it has become very frothy - full of tiny air bubbles. So I let it sit for a couple of days. Check oil again and it's completely normal. Stat it up and the same thing happens. Oil is frothy again! I have since pulled of the oil pan to check the pick up tube and the oil pump. Both seem fine - tube is not clogged and the oil pump is engaged with the crank and rotates properly. By the way, the oil level reads normal, not over full.

Thanks!

If you have the proper amount of oil you could have a bad head gasket seal. Can you tell if water is getting into your oil?? Any milky appearance to it?? I know it's hard to tell since you haven't run the car much but this is a possiblity.

If okay, check your oil lines to and from the turbo. The turbo can whip the oil into a frothy lather but more so at high RPM's. At idle this shouldn't be a problem but if for some reason you're under feeding the turbo I suppose it's possible.

Also, have you checked the actual oil pressure just to verify the alarm is related to the frothy oil.