If you refer to Peugeot 405, sounds like head gasket failure. On a car of that age (and French), consider it terminal - you'd do better spending the money on another car.
no oil and water do not mix
Yes
Oils and water are not miscibles.
There should be no problem with mixing them.
Yes
You probaby have a blown head gasket, cracked head or both. Try doing a compression test.
No, it is a physical process.
It could be your oil cooler that is coroded. Try changing that and then see if there is still oil leaking into the water. The oil pressure is higher than the water pressure hence the one way leak. If the water is in the oil it is probably the head gasket.
very bad! change the oil
Definitely NOT......Water & Oil galleries do not lineup!
You probably cracked your head gasket and now have water or antifreeze mixing with oil. Check under your oil fill cap if it looks like a slimy milkshake cahnces are that's the problem.
The primary emulsion is formed by mixing the entire amount of oil with the gum, adding the water required for the primary emulsion all at once and mixing vigorously until a thick and sticky emulsion results.