Water can get in if it's stored outside, and it will emulsify in the oil. You can get some of it out, but the majority will be held in suspension.
If it's antifreeze, is there a hydraulic oil cooler? It could be leaking, same thing, the antifreeze will mix with the oil and be held in suspension.
Once you find the source, drain it best you can, leave it draining over night. Then do a partial fill, cheap stuff will do, run through all the motions, drain it again. If there is a filter, change it, then fill it with the good oil. It may still be a little milky, but will clear up as the water boils off.
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Today's Featured Article - Storing Your Tractor - by Staff. If your tractor is going to be stored for any length of time, a few precautionary measures are helpful in preserving various parts, also in avoiding future difficulty. Store tractor under cover. If impossible to place tractor under cover, be sure to cover air stack and exhaust pipe. Drain radiator and engine block. To avoid gum content collections, drain both fuel tanks and carburetor. Leave radiator and fuel caps slightly loose to protect gaskets. Block tractor up to remove weight from tires and to keep tires from contact with moist floor.
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