Cleaned out the sludge but oil light still remains on. Any suggestions?

I doubt you have sludge in your engine since oil has detergent in it to prevent this. I would stay away from this dealer.

flushing your engine could only cause more problems as in sludge breaking loose and stopping up oil pick up screen which would cause low oil pressure which could be fatal to any motor only true fix to removing engine sludge would be to completely disassemble engine and clean with high pressure or have cleaned by machine shop in a vat with solvant

I would suggest you have the oil pressure tested with a mechanical gauge to see what it is. Removing a valve cover would probably show evidence of sludge in the engine if it is there.
I have used kerosene to clean out engines but it is not the safest thing to do.

oil sludge can be cleaned out at a shop, i can't guarantee you won't have engine trouble with tapping or knocking after, the only thing that causes sludge in a 6 year old car is neglect and lack of maintenance.

I'm betting that this is the 2.7L engine. If it is, you may have caught this in time. There is a very good possibility that the oil pump intake has become plugged with sludge. You will have to have the oil pan removed so that the pick-up can be cleaned and the engine flushed out. After that you must use synthetic oil. This was a huge problem, lawsuits galore. Google: "2.7L sludge" for more info.

you could have sludge in the crankcase that is blocking the intake screen for the oil pump ... that happens a lot if oil isnt changed regularly .. in some cars it happens even if you do. ...the clatter you hear is the valve lifters collapsing . they need oil pressure to keep them extended properly ... if your oil pump isnt bad it soon will be .. it needs lub also or it will quickly be damaged ...sometimes you can wash out the sludge with kero/oil mix but the safe thing to do is drop the pan .. clean up the sludge and replace the oil pump.while you are there ...once you have the pump working you can first run cheap oil to clean out things ..then drain and install synthetic ...that will do a better job of cleaning out remaining sludge ... of course make sure you have the proper amount of oil to start with .. make sure there is no water in the oil (milky oil) .. make sure oil filter is not clogged ...some oil filters have a one way valve ... that can stick if the car isnt run for a long time .. ....

the oil light coming on is the most serious .. those cars have a problem with sludge buildup in the crankcase .. usually that happens if the oil isnt changed on schedule .. but sometimes even then ... replacing the oil filter and using a good synthetic oil might make a difference if its not too bad ... the oil pressure switch could be bad or (most expensive), the oil pump could need replacing or cleaned ... you can have an oil pressure test done to determine if the pump is ok .. it is not safe to drive the car if the oil pump is bad, or if the crank case is full of sludge .. serious and expensive damage can happen to the engine .. the pressure switch is not expensive and easy to change .. if the oil pump pressure is ok then i wouild change the pressure switch .. sludge often clogs the intake screen of the oil pump .. then it cant pump oil .. of course this can quickly damage the engine .. you can drop the pan and clean out the sludge but they often just change the oil pump while they have the engine apart .. once its cloged then it can be damaged itself ..
the steam coming out of the vents could be the results of engine overheating (from lack of oil) or a leak in the heater core ..

the buzzing is most likely the speedo cable ive had a few older cars that do this you might try having someone oil the cable if they can or you can as for the oil light it might be low oil pressure or a bad oil level sensor or even a dirty plug on the sensor

Smoking & sludge ...OK, first, smoking on startup generally is the result of worn valve guides or valve stem seals. Excessive sludge in the engine can worsen this condition as sludge buildup can block oil from draining back to the pan, instead remaining inside the valve cover where it can run down the valve guides overnight.
If you just got the car and want to get rid of some sludge, change your oil every 2000 miles for a few months. Use a good quality oil and add a pint of marvel oil to it each time. On an engine with substantial sludge, I don't advise using any flush products. They work too fast and end up jamming residue into the oil screen, preventing proper oil flow to the pump. It took a long time for the sludge to form, don;t expect anything will remove it immediately short of a complete teardown & rebuild. If that's the only problem you have just follow what I said and you will be OK.
No coolant loss, overheat or anything? Did sludge suddenly appear or as I thought, it just built up over time?

I have a 1997 saturn 1.9sohc and I noticed a brown sludge seeping out of the water res , but no water on oil dipstick. Washed out the resivior with a hose running for 10 min and it got alot of the sludge out, but the next day I checked the fluid and there is a quarter inch of oil on top of the water. it is creamy brownish white . its not overheating or causeing any problems yet but I am worried and broke what shold I do?