Melt the butter in a saucepan over medium heat. Add the garlic, salt and pepper; cook and stir until fragrant, about 5 minutes. Stir in the milk and half-and-half, and transfer to the top of a double boiler. If you do not have one, set the pan of soup over a pan of simmering water.
When the milk is hot, add the oysters and heat just until the oysters are opaque. Do not allow to boil. Season with fresh parsley, cayenne pepper and sherry. Go easy on the sherry until you are sure you like it in the stew.