I have mercruiser with "898" stickers on valve covers and outdrive. It is two barrel with log style manifolds. Engine was installed several years ago by home based "marine mechanic" who said he had the engine built by local marine builder. Rest of the drive setup was transferred from wrecked boat. Remanufactured block has about 175 hours on it, including tune up and fooling around time on the trailer. Engine over-heated on trailer when thermostat stuck and I didn't pay close enough attention. I changed thermostat, ran engine on trailer for about an hour. There was no immediately apparent damage. Boat was stored, as it has been since new engine installation, in unheated but covered building in rainy Oregon. Drained as usual: two plugs on block (each side); one plug on each manifold; and one plug on each elbow. Power steering cooler hose disconnected from pump housing and filled with antifreeze until outdrive drips green. All this one year ago. I go sick and I did not run boat at all until June. My daughter and her friends took it out and came back after three days of playing on the water with engine noise and the oil very milky with water. Local marine mechanic (different guy) said lifter noise and water was from condensation. I thought probably head gasket. He flushed with transmission fluid/oil and changed oil, and gave it back to me. I found oil still milky after a few minutes running on trailer. I have changed oil three times, with new filter last time. I still see a little cloud in the oil, and now I am finding particles of something on the dipstick, and still have some kind of valve train noise. Question; How do I start to decide for sure where the water is coming from? Do I have great risk of further damage by letting it sit longer? Can I, as novice, tell what the problem is if I remove manifolds and heads? Sorry this is so long, but I just want to ask clear questions for your consideration. Thanks for any help figuring this out. John