Re: Water in the oil...
Sounds like you may have failed to retorque the heads after running for a while. I always retorque twice. A buddy of mine had a Model A engine professionally rebuilt, brought it home and never started it for 5 yrs. He installed it in the car and we put water in and fired it up and it sprayed water out the tail pipe like a fire hose. I thought the head surely must have a big hole that everyone missed. So we pulled the head and no problem found and I asked him if he had retorqued the head and he had not. We put everything back together and torqued the head and it ran fine. We let it run 30 min. And retorqued the head and they all took a half turn on the torque wrench. A month later he retorqued them again and they moved very little and the car has never leaked again. Good luck with your engine.
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