Re: Water in the oil...
While I agree with G.M. and both sides should be checked as he indicates, I would focus on the side you dis-assembled. If the engine been rebuilt recently your gasket surface s/b pretty good. If it's an older one with lots of miles the gasket surfaces will need attention? In either case after cleaning a thin even film of hi-temp RTV ( copper ) on both sides of the gasket then reassy but don't torque ( light snug ) for a day. Then full torque the next day after RTV has cured. If it was a bad seat for the gasket to the head or motor that should work.
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Nomad
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