that white frothy stuff inside the valve covers is just oil. I see it a lot on oil fill caps when changing oil at work, and it seems to be caused by a bad PCV valve. If the vapors cant escape, they'll just build up at the highest point of the motor (valve covers, oil fill cap).
I forget what is it, maybe its acetone or mineral spirits, but there's some kind of cleaner that takes hg's off pretty good with a cloth. I just went over it VERY carefully with a razor blade and finger nail, making sure not to remove any metal, or scratch the deck of the block.
For cleaning out the motor internals, you could put some Seafoam in the oil to clean everything out. Or for a deep clean, put in tranny fluid in one of two ways:
1. add 4.5 quarts of tranny fluid to an empty oil pan, turn car on and leave it in park, do not drive it. Wait for car to warm up to operating temperature, and shut off. Replace tranny fluid with oil, drive for 50 miles, and change oil again.
2. add 1 quart of tranny fluid and add oil to fill the rest of the pan up, drive for 50-70 miles, change oil.
Tranny fluid is an oil and a detergent, it cleans out a block really good, but you dont want to keep it in there, since its designed for a tranny and not a motor