what causes sludge in the oil, and loud ticking noises.

What color is the sludge? if it's grayish white, pop the radiator cap while it's running (when it's cold, of course!) and look for bubbles, like blowing in a drink with a straw. If there's a pretty hardcore bubbling going on plus gray sludge, head gasket. If gray sludge and no bubbles, probably intake gaskets. If it's regular old black sludge, run a can of engine flush and change the oil with a good Valvoline 10W40 or a 30 weight full synthetic.