Mineral Transmission oils live up to 500,000 volts, and are designed to get heat out, resist electrical breakdown, and protect mixed metals, while not letting the smoke out.
An AC condenser will have heaps of heat rejection capabilty.
Transformer oil is a good thought, and has a good voltage rating. It used contain PCBs, no longer. Transformer oil is used in RF "dummy" loads so frequency isn't a problem. I'm a little unclear about the point of it all, though.