I bought an 89 xj 4.0 last year drov it around untill i noticed milky oil on dipstick parked it got it apart last night and head gastet is ok could this be cracked head

 

Very well could be, if you clean it up with a brass brush, and you dont see a crack then it will need to be taken to a machine shop and checked. Just quick question or 2, how much did you drive it? Because if you only drove short distances, the oil doesnt get hot enough, long enough to burn the moisture off. Also did it overheat?

 

Irregardless the head should go to the machine shop for testing.....

That is the next step.

 

I drove it not much last year but the head is leaking oil so I got another head To put on it when I changed the oil last year after getting it the oil had a little water in it the antifreeze was really thin so I changed it the hoses were really old a lot of stuff on it might be original