OMC 2.3 Water/Oil Leak

Good day all,

I have a 1989 Bayliner Capri 1750 with the OMC 2.3 and Cobra Outdrive. Last winter I had some issues and was unable to winterize the boat. We had a heck of a winter. It did sit half of the summer so im sure some of the water evaporated but now all.

Went to start it a few days ago and it took forever. and an entire can of starting fluid. When I hook up the muffs I noticed water leaking from around the bell housing near the rear. Few more tries and she fires right up and runs smooth. It wasn't 30 seconds or so and i noticed "chocolate milk" in the bilge. I immediately killed it and checked dipstick. No water but it was completely empty. Topped off the oil again and started it and instantly sucked all the oil into the bilge with water from around the bell housing area.

Its weird that no water is in the oil pan but its obviously mixing at some point.

What ive done up to this point:

Removed outdrive
Removed engine
Removed Bell Housing
Removed aluminum "final drive" Bolted to the flywheel.

I stopped here: There is a 2" hole behind the flywheel where you can peek in and see 1 of the cylinders. water and oils is mixed at this point. In the housing surrounding the cylinders. This should not have anything in it.

THE BIG QUESTION:

Is it the head gasket? I'm almost positive it is.. What else should be checked before moving forward?

Is it the head gasket? I'm almost positive it is.. What else should be checked before moving forward?

Ayuh,.... I doubt it's a head gasket, when that core plug is blown out,....

It's more than likely a cracked busted block,...

If you do end up being able to save this engine, do yourself a huge favor and throw away all your starting fluid. Only use gasoline to try starting an engine.

1989 omc 4.3 liter gmc engine water in the cylinder when I took the plugs out, the engine did not over heat every thing was running fine until yesterday it won't crank It sounded like it was ceased and when I removed the plugs it cranked no problem but lots of water came out of the spark plug holes.
What should I check for or where do I begin.