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The white stuff is just unsealed alloy surface corrosion. Hit it with some scotchbrite if you really must.
All that has been said already in this thread is true. The gasket appears to melt and fill the channels of the casting, so the gasket is no longer tall enough to be a gasket. Only use genuine gaskets for this job, not worth mucking around with aftermarket ones.
N54/N55 dont forget to replace the two small orings for your oil cooler line connection.
Cross contamination is possible if left unfixed for a long time. During repair, some slight cross contamination is possible but it's negligible if you take precautions. I wouldnt flush the cooling system but i would change the oil.
- Remove the oil filter and suck out all remaining oil in the housing
- Open the coolant cap to relieve any pressure
- Remove the serpentine belt and cover your toothed pulleys. Buy a new belt if you see flat spots, melted rubber on the flat idler pulleys or other signs of wear due to oil contamination
- Inspect top coolant hose and the smaller one beneath the housing held by two 10mm bolts (the Mickey Mouse one). Buy new hoses if you see any swollen rubber
- Remove the top coolant hose (big one) to allow most of the coolant to escape from the housing.
- N54/N55 you must elevate or remove the intake manifold to access one bolt. I usually just elevate and use a skinny wobbly extension.
- The second difficult bolt is the one pointing downwards near the Mickey Mouse coolant hose connection to the head. If your hose is not swollen, id suggest using a 12pt 8mm spanner carefully to remove the bolt. Alternatively, remove the Mickey Mouse connection and use normal etorx sockets.
- Slacken all bolts before removing housing from vehicle
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