My only familiarity with dexcool is was in my 98z71, and I never saw any sludge in 4 years with it. I can tell you a thermostat is strictly a mechanical device, and it either works or it doesn't. It can't cause a chemical reaction. You already know this, but it would be nice to have a couple of our mechanics or our GM employee jump in here, then print out this thread and take it back to Jiffy Lube.
What does the sludge look/smell/feel like? Has the car had a mix of the typical glycol antifreeze and dexcool at any time? My concern is what this sludge may have done to the internals, especially the radiator.
If you haven't read the dexcool info up in Techinfo, read up on it. There'* identical info at www.bonnevilleattitude.com
and the Rat may have more posted there now. Down in the Techinfo forum near the bottom of the index page.
Whatever you find out may be of use to others, so let me know if I need to add any info to that article.
My experience with Jiffy Lube and similar discount oil places is typically bad. The reason for this is the Manager. Some of them require their employess to show you color samples of the fluids in your car, then give you bogus info on what GM recommends for fluid change frequencies. I've burned a couple by simply pulling out my owners manual and calling bullshit. If you do this, do what I do, and call bullshit in front of other customers. It teaches them a good lesson, and others can get their warning that way. Deathrat used to manage a place. One of the good ones. Try to find a locally owned or better managed place to have your oil done. I'd normally do my own, but we have a really good one here. I take my own oil in (Mobil 1) and they do it all up for me. Besides, the Manager just bought a 97 SSEi, and I get extra attention now
It'* nice to have a place say "it'* getting close, but lets wait til next time and see what it looks like" instead of trying to gouge me right away.