oil sludge

so my boat has been running great since I figured out the alternator issue. Checked oil yesterday just to see and couldn't get a reading so I added 3 quarts. Checked again today to see if had burned it all up after yesterday and the whole dipstick is covered in a grayish sludge. Does that mean my engine is cracked? I suspected at the beginning of the season because the freeze plugs were popped, but I had it checked and they couldn't detect any leaks and the oil looked fine after a few test runs.???