1999 Mercury Cougar transmission I think.

Are you referring to the coolant recovery tank? If so, could it be trans fluid mixing with it? If so, don't drive the car until you get a response from me. Also, make sure the trans fluid doesn't look contaminated and it is full, with the engine running, the trans in park, and the engine at operating temp.

My concern at this point is the description of the overflow bottle. Based on what you said, it sounds like oil or something is mixing with the coolant. Since you are having a transmission issue, it could be transmission fluid. You see, the car's radiator functions both as a cooler for the antifreeze and as a transmission cooler. Over the years, I have seen many times that the radiator came apart internally and coolant and trans fluid mixed. This could take out the trans really fast. That's why I said don't drive it until I heard from you.

Do me a favor just so I know. Take a sample of what is in the overflow jug and have it looked at to see if a mechanic can tell you what it is. My not being there limits what I can do.

If you can, have that done and let me know what you find.