I have a 1989 OMC 3.0 (GM), sterndrive. I just rebuilt the engine. I have been having a tough time gettting the valves adjusted, but made progress by adjusting them with the engine running. I've taken it out twice, the first time I didn't have the shift cable adjusted correctly so I had shift problems; also, the valves were noisey. The second time I took it out I ran it for a while, then the engine quit from what I think was the valves seating and I lost compression. I assume that when I adjusted the valves, I made them too tight...but that's for another thread. The real question: After each time I took it out I noticed the oil had water in it after (light brown milk; Yes, I changed the oil in between trips). Being a car guy, I assume a head gasket, but I've been reading threads that talk about a manifold or elbow leak. I don't understand how water can get into the crankcase by a leak in the manifold. Perhaps someone can clear that up for me. Also, before I bought it the boat was in salt water, so there was some corrosion damage to the manifold and elbow. I did replace the elbow but not the manifold. Please help.