I have a high power LED (100W) that needs attaching to a heatsink (and presumably fan). Could I just immerse it in an insulating fluid and use natural convection/conduction to cool it?
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Liquid cooling can be, and is used in some electronics equipment.
You still end up with the requirement to remove the heat (and you did mention using convection and conduction). So you end up having a heat sink (or other heat removal device) somewhere remotely located from the heat source.
The benefit of liquid cooling really comes into play when the liquid is circulated (moved), moving the hot liquid to the remote heat removal device. Without movement of the liquid, you end up with just a heat reservoir.
Another consideration to take into account is the purity of the liquid. If contaminants get into the liquid, negative results could occur.
Also, liquids have different specific heat and thermal conductivity, which would need to be considered.
Resistivity of the cooling medium could be of concern if your electrical contacts are also submerged.
EDIT 1 : Caution : I am not sure that it is relevant here, but flammability of oil should be considered as potential hazard.
A little aluminum can go a long way, even aluminum with no fins as a heat sink. Anything to increase the surface area. I would recommend trying a piece and see how it goes, even a 1/8" or 1/16" thick piece that is a few square cm's. If you can put fins on it your in even better shape. Digikey also has small heat sinks in stock that would work well, thermal grease also helps.