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$1,200 isn't bad if everything else is in good shape. And oil in the water is better than water in the oil...
It could be the oil cooler seals, or it could be a head gasket. You oughta be able to tell with a compression test.
It's unlikely that the oil pump failed - that wouldn't cause oil in the coolant, it'd just cause low/no oil pressure. And unless the car overheated badly, it's unlikely that the block is cracked.
Best bet is the oil cooler.
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16 Ford Expedition
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