Looks like a handbrake warning light. You did check to make sure the handbrake is off? 4WD light is most likely a bad sensor if it is coming on when in 2WD mode.
The sludge sounds bad and at best is a blown head gasket and at worst a cracked head. How does it run? It is something that you should look at getting fixed, as if coolant pours into one of your cylinders, it will be a bad, bad thing (something about fluids not being able to be compressed (IMG:
style_emoticons/default/amen.gif) ). Either way, you will need to have your head pressure tested, as some cracks are a bugger to find.
Low Km's is one thing but you don't know what the engine has been subjected to. Lot of Jap motors sold here as low Km motors have spent hours just sitting in traffic, heating up and sometimes cooking. Look for water leaks around the water pump, which is often a good sign!
Good luck