coolant overheat and red sludge

[TUG]

On boxing day i was driving my 2001 tdi sport passat when all of a sudden my dash light up and said stop check coolant! i pulled over and notice my temp neddle was in the red!
when i i checked the coolent all the water was red and steaming out the overflow at the back!! i managed to fit 3.5 litres of water in there and could not see any apparent leaks!!!
since then i have shot down the m1 at a fast pace with no problems but decided to check the water and inside there was red sludge like cr*p all in the chamber!!!
what the hell is this???

[snapdragon]

Is it an automatic? Could be automatic slush leaking from the transmission cooler, which would mean water in the autobox too. or it could just be that the coolant is pink and may look redder with oil in it.

[TUG]

No it is a manual and from what i remember it was not pink befor!!
??? gonna try and flush the rad system but still dont know why it overheated???

[Crasher]

G12 coolant is red, G12+ is purple.