Burning oil and goop on manual Saab?

I was driving a friend's 1997 Saab today, when something went wrong. It's a stick shift and I had some trouble getting it to go up a steep hill. As I depressed the gas and eased up on the clutch, the car started revving loudly, and there was strong smell of burning oil at the same moment. When I pulled over the car was smoking under the hood. It had oil, but when I looked at the engine, it looked like it had "thrown up" a bunch of oil goop! This goop was the consistency of of tooth paste and was dark brown in color. What could the problem possibly be? This is an old car, but am I to blame? Will this be an expensive fix?