Water inside Motor from???
 

I'm Confused. I have a Merc 525 with 170 hours used in Salt and Fresh Water, Always flushed after every use. Cranked motor on the boat after it sat for about 2 months and sounded nasty. Called my mechanic and had no compression in Cylinder #8. Pulled headers and found Starboard Side was cracked/leaking other side tested good. Motor shipped out for rebuild and found water in all 8 cylinders and #8 Valve stuck open not sure if it was exhaust or intake valve but i'll find out soon.

How does water get to the other side of the motor from a header leaking on one side? If it was the intake valve stuck open, would it pull water through the manifold to the other side?No chance of inversion because last time the motor ran it was on a lift being flushed with fresh water and ran perfectly.

Any Ideas would be appreciated.

does it have innercoolers?

No Intercoolers, Just a stock Merc Racing 525, naturally aspirated and closed cooling system.

Header leaked (as usual) got in the intake, when you cranked it, it spread.