Cooling issue, but this time it's to cold...

Doesn't some get thru by design? So the bypass only circulates thru the motor.
NO... and YES. The only coolant that can flow to the top of the rad is through the t'stat or around it via problem in the t'stat housing. The bypass puts the coolant right back into the water pump input.

These cooling issues might be the source of your other problems.... it would explain grey condensation on the dipstick for example. Running so cool, the internals never get or stay up to proper temps.... like piston expansion.