That was my thought too but I'll see in a few days. Weather here in MN is crappy tonight. I am going to wait until Thurs. to get everything loaded and off to the dealer. If it is the oil seal the dealer thought around $300 for parts and labor and they would do the water pump seal at the same time. We'll see what happens......

My guess is a head gasket as well. Esp with coolant in the oil!!!!!

I have had a 98' 500 sportsman, 01' 500 sportsman, 03' scrambler, and still have an 04.5' 700 EFI sportsman, 05' 500 scrambler and every single one of these machines has mysteriously lost coolant. I have to and had to add about one overflow tanks worth of coolant to these machines per summer of use. I don't know where the coolant goes. Oil is always honey yellow and never overfull and I never see the things boil over....The only thing I can think of is that coolant is typically mixed at a 70/30 or 50/50 ratio and this magical coolant loss is nothing more than the water of the mix simply evaporating???? weird stuff.....

Looks like the dealer is going to look for water getting into the oil from pressurizing the coolant system forcing the oil past or around the water seal. Might work if the motor was hot. Head gaskets don t fail usually unless lets say you ran it low on water and warped the head. Yes then the head gasket will fail! Finding the root problem is most important here so it doesn't happen again.

Giving an update. According to the dealer the head and base gasket are OK the motor is not burning coolant but the motor is full of coolant. They say that is consistant with the oil seal going bad and allowing coolant into the bottom half of the motor. I am waiting to talk to the head service guy to confrim and to make sure if they replace the oil seal and it is something else, I'm not on the hook. They did a pressure test and there were no leaks found anywhere else. They said they can just replace the oil seal from the other side and not do the water pump seal. Does anyone else have some alternate advise??

OIL Seal question UPDATE
 

I am picking my wheeler up tomorrow from the dealer. It was a bad oil seal. They replaced the oil seal and the water pump seal while they were in there. They have been running the machine on and off for a few days and it appears to be fixed. It was not the head or base gasket. The engine filled with coolant but it was not being burned thru the exhaust. Thanks everyone for the ideas. I figured I'd give the update.