air compressors

i have a poter cable 80 gal 175psi cmp that has started to develop a grey milkey oil as observered through the sight glass. i drained the cmp tank and filled it back up with new pc oil but after approx 10 hrs of operation, the oil is grey milkey again. the unit sits under a covering, in south alabama heat. is this water getting into the oil or do i have bigger problems?

I always thought that your symptoms indicate water contaminating the oil...