Toyota Repair: Tercel Wagon Blowing Cool Air, electric cooling fans, pcv valve

Question
I have a 1987 Tercel Wagon that began blowing cool air out of the heater. Enroute to work, the temperature gauge went to hot, and as I was close to home, I returned home. Did not appear to have lost any coolant, so I changed the thermostat. Now the temp gauge barely moves off cold, and only slightly warm air comes out of the vents.

Also when I purchased the car, the previous owner informed me that oil will get into the bottom of the air cleaner, which does happen. What causes this - I've never seen anything like it. Until the heating problem, this car has been a dependable, tough vehicle.

Thanks... Steve

Answer
Did you replace the thermostat or remove it? The engine should come up to operating temperature, the thermostat may not be the correct one, check to see that the electric cooling fans are not on all the time.
The oil is normally caused by blow-by from the piston rings which may be worn, it could also be caused by a clogged PCV valve or a breather hose on the valve cover.