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Yes that is the oil cooler, drain the coolant, then remove it.
That oil look looks bad. A leaky oil cooler can cause that.
If the oil cooler tests OK, I would find a good used motor.
If the cooler is bad, I'd flush everything and try a new one.
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1998 Boxster with 7.8 DME, 2005 3.6 liter/325 hp, Variocam Plus, 996 Instrument panel
2001 Boxster original owner. I installed used motor at 89k.
1987 924S. 2002 996TT. PST-2
Owned and repaired Porsches since 1974. Porsche: It's not driving, it's therapy.
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