Originally Posted by JCL

The condensate paste you see is an emulsification of oil fumes and water, usually condensation within the crankcase. In normal operation, the moisture is boiled off and doesn't matter. If the engine is subject to lots of short trips and doesn't get to full operating temperature, or is not then held at that temperature long enough to get rid of the moisture, the paste forms and accumulates over time. It ends up in the crankcase ventilation system and separator. It sits there, and if you get very low ambient temperatures it can freeze, causing problems. See posts on CCV. The CCV doesn't cause the condensate, it is simply where it collects.

Clean it out, put it back together replacing any soft or hardened hoses, inspect the diaphragms and replace as necessary, do a hot oil change, make sure you drive it enough to get it hot from time to time, and watch the oil filler cap to see if it returns.