I have heard of several people having similiar problems as you. If you have the Lightning headers with the tail pipes that go directly to the headers, you need to high temp silicone where the tail pipes meet up with the headers! I think there are two bolts where they hook on to the headers. If not siliconed you will get reversion into the exhaust valve and into the oil.

Hope this works for you and is a cheap fix.

I just pressure tested my 502 mag the ther day. I blocked off the water in and the water out hoses with copper sweat pluming cas, just pushed them into the hoses and clamed down. then removed my water temp sender, and put a 1/4 inch barb hose fitting on thermastate housing, then using my Snap-on car pressure tester, just take the rad cap adapter off and conect hose to barb fitting.

How long should I monitor it?

Pumped it up to 16psi. Hadn't moved after 40 min or so. Checked it right at an hour, and it had gone down a little bit. less then 1#

Any thoughts?

test #2.

(retightened all hose clamps) Pumped up to 18# this time. almost an hour, and gauge has not moved.

it sounds like the headers are leaking,pressure test then,if they are leaking,you get reversion,that will put water in the oil.

One other thing that needs to be checked and that is
1. Are you using aluminum heads ? If so , how many hours are on the engine.
2. CMI Headers ? Look for leaks around the inside welds at the flange.
Do check ALL coolers if more than one.
And DSL is correct from what he has said.
Good Luck

It's the headers. Rseal those babies at the tail pipe connection. One word Reversion>>>>>>>>>>>>>>>>>
Call Lightning Headers, they will tell you...

Merlin Alum heads. 25 hrs ??? on the motor

Lighting headers. Headers are one piece straight to a hose, to the tip.

Lightning made different style headers, some straight to the hose and later to the tail pipes! Even though some look like they go straight to a hose, they connect to the tail pipe underneath the hose. You will have to loosen and remove the hose, unbolt the tail pipe pull it away and re-silicone where they meet.
I know it seems crazy, but lots of guys have thought it was a bad head gasket, cracked head/block ect.

Thanks. I will check that out.

Sounds like exhaust problems for sure. Run the motor on the water and get it up to operating temp, with fresh oil of coarse. Bring it back to the dosck and pull one or both headers away from heads. If you have any water then you have reversion or a crack. Lightnings tend to crack up at the collector inside and it's very hard to see. If you overheat them from bagging a pump or running dry on the trailer you will distort the internal collector and that can cause it to crack. If you can, look up inside the header from the tail end. You should be able to see a round collector, if it's not perfectly round then it's been oveheated and is likely cracked.

Have you looked at you spark plugs for signs of moisture? That is a good telltale that there is an exhaust issue.

If you pull the headers off and send them to lightning Jan will test them for you.