I too am wondering how water got from the intake side to the exhaust.The only lead to the exhaust is the heat riser passage and it is on the other side of an intake port from the water passage. Is it possible, since no water appears in the
oil, that some coolant was introduced on the removal of the intake and is just burning out?
Antifreeze steams at a higher temp and if introduced into the exhaust can take several minutes to get to temp and burn out completely. I'm curious to see how this plays out. I guess it could be seeping into one of the end intake ports and steaming in the combustion process, a plug reading would show that.