Think so - I did look at that thread and it made no sense at all - Cp of oil is about 40% of that for water so that you'll get higher temperatures. The real problem is that mixing oil and water and agitating it violently (as in a pump) will result in it emulsifying and becoming a solid...
The whole point of transformer oil is that it can be used as a coolant at high voltages (typically up to 400,000 Volts). 240v is no problem at all, and some computers have been cooled by submerging them directly in oil.
http://www.eppenga.com/folder.php?id=21