I got a vanilla milkshake in my valve covers but not on my dipstick. What would cause this. It is way to much for condensation, When I pull the vents off the covers while running it will actually spit water out!

Could be early signs of reversion. How old is you exhaust and what is it?

Not enough oil temp or and excessive blow-by.

stainless marine, got a couple seasons on them. I just put the two inch spacers on them to get over my rubrail and noticed some water leaking out of the flange where the manifold and riser are clamped together. But there shouldn't be water in there unless: reversion, cracked manifold or cracked riser right?

JC I did a compression test and 2 4 6 8 and 7 were all around 140 but 1 3 5 were around 115. Would this show blow by.

Being that 3 cylinders are down from the rest could be a sign of those cylinders not sealing and causing blow-by.

If you been running it like this for awhile. Take the engine out and tear it apart and check your bearings. I ran mine like that for a very short time and wiped out all my bearings. Bearings don't take to kindly to condensation even for a short time.