What potential damage am I looking at having blown a freeze plug, there is water in the oil
No such thing as a "Freeze Plug"
They're actually called "CORE Plugs". Placed in holes left in the block casting as a result of the casting process.
They also seem to occasionally 'pop' out when water left in the block freezes.........
The block frequently cracks too.....and unfortunately, since the Core-plugs seem to pop out when the block cracks due to freezing, it might be more accurate to call them "Freeze-damage detection plugs".....
Your next step will be install new Core-Plugs so as to pressure check your block.
If the block will hold 15 PSI or so, you lucked out. Since you already have water in your oil, that will be somewhat unlikely. If this is the case, you'll need to find another engine.
Sorry about that............
Rick