I have a '97 Honda 90 that is getting water in the oil. Oil gets gummed up and the low oil pressure switch causes it to go into limp-home mode. Dealer says the leak could be anywhere and says its not worth fixing, wants to sell us a new engine. Engine runs fine after an oil change, but oil switch goes after a couple of hours of running. Suspecting the head gasket I did a compression test and got 220psi in all 4 cylinders. But perhaps the gasket has failed at another point.

What are the likely causes for water leaking into the oil? This is salt water use and previous owner may have neglected maintenance, so something probably corroded. Is the head gasket the only failure mode?