Water in #7? and milky oil. Need Ideas
 

This is a fresh motor, new tall deck block, new iron World heads. Motor was dynoed in the fall then winterized.
Spring. Changed oil, it was fine. installed in boat and ran on hose at low rpm's, on several different occasions. Finally put it in the river and happened to check the oil before taking off on plane. found milky oil. shut it down and mad my way back to the ramp.
Pulled plugs and found water in #7. Compression was fine. pressurized #7 at TDC and had bubbles in coolant water. Pulled intake to reveal intake gasket leak at front coolant passages on both sides. Water source found. Pulled head and found a good head gasket with no signs of failure. Pressurized cold KE aluminum headers with air and water, no leaks.

Heads and block are new so crack or pin hole seem very unlikely. right? So why the water in the cylinder and why the bubbles in coolant?

Dyno guy claims dyno does not build pressure in block, its free flowing water.
Could there have been error in my( 80 psi air pressure) leak test, hose was still hooked up to flush port with cheap valve turned off.

where is the water in #7 coming from?

Are you sure the intake valve was closed when you pressurized that cylinder?

I would pull the head. Could be a bad gasket.

Wannabe

I did.