I have a 98 454 mag mpi gen 6 motor that i had rebuilt in june. The motor har about 650 hours and they did a full rebulid. I got the motor back, installed it myself and i was taking it out a couple times a week. Shortly before i hit the 10 hour mark i checked the oil and it seemed a bit high do i decided to do an oil change. The oil came out milky and i believe there was about 1.5 quarts of water in it. I took the boat back to the builder and they pressure tested the cooling system (open cooling) and said there was a leak. They removed the starboard exhaust manifold pressure tested it, it passed and when they put the manifold back on the leak magically disappeared, they are now telling me the the water got in the motor because the exhaust flappers were removed. The flappers were removed in 2010 by the previous owner and they have never been an issue. The boat is trailed and sits in my garage and the exhaust come out the transom about 8" above the water. My question is, is it possible for water to go up the exhaust and get in the engine oil while the motor is running?

Thanks

Simple answer is no. I'm thinking they may have used the wrong head gasket or you had a leak at the intake, especially to get 1.5 quarts of water.

angle of the ramp backing in to fast can shove water into the exhaust

Its the angle of the dangle

Did they say why they chose that manifold to check ?

Someone here had an issue with the boat being parked in the driveway with the nose down sucking in water while running on the hose.

Did they remove riser to pressure test manifold? Maybe riser gasket was leaking and they corrected it on re-install.

How do you get 1.5 quarts of water past the pistons without hydro locking the motor?

Intake leak at the water passage / crack in the water passage in the actual intake would put water into the engine via the lifter valley is the most direct route w/o locking up a cylinder as the engine is run - small leak from a bad seal

Exactly my point earlier.