Well I have yet to positively identify this stuff..I am still leaning towards a sealer, only because it is a very dry and powdery substance, and clay like while still wet..
Oil seems fine, no sighns of water on the filler cap as well..

Second update...found a radiator service shop finally !!!!Guy claims he can handle it and can benchmark the flow rates and what not after he attempts to clean..
I did bring the radiator/ bottle as well , showed him the sludge on the cap, and he positively feels its a sealer..
so while that is at the shop, i pulled upper and lower hose, pulled thermostat..this time it had a significant amount of biuld up..

so with upper and lower hoses removed, heater core out, i had access to shoot water in the motor everywhere...i also went to local hardware store, got about a 3" length of pipe, (same thread as block drain), stuck a hose on it and attached garden hose and flushed from the block drain as well..
seems to be pretty clear now...we shall se what happens come monday with the radiator shop...

thanks all