For starters take the cap off the radiator or expansion tank. Fire up the motor cold and see if you get any air bubbleing up through the coolant. You could put a radiator tester on it to check pressure. Doing that would tell you if your were getting compression in the cooling system..i.e. leaking head gasket. Generaly speaking if you have
oil in the water, you have water in the
oil. Im not 100% certain on a cleveland but on the 302,351w,460 etc...there are pressurized
oil passages close to water passages (cleveland did some goofy stuff). The oil drains back at the bottom of the head and ou havewater all around that in the block...but you would have water in the oil.
I'll bet your head gasket is leaking somewhere...just my thoughts.