Re: water coming out of #1 spark plug?
Inline Sixes don't have cylinder heads. The cylinders are cast as an integral part of the block.
The cover on the back of the block just seals off the large area where water circulates around, to cool the cylinders. The tops of the cylinders are machined flat and that's what the cover seals against.
It's very common to see leaks where the cyl block water jacket cover gasket seals right around the spark plugs. The fix is to pull the cover and replace the gasket.
Just watch out if you've run in salt or very alkali lakes 'cause the 1/4-20 bolts can get stuck and will break if you use too much force. Heat from a propane or MAPP gas torch, carefully applied, will help loosen the bolts. Applying a thin coating of Permatex #3 aviation-type gasket dressing will keep them from siezing up in the future.
For a "Quick and Dirty" fix to get you out on the water, seal up the leaking area with RTV. Pull the spark plug out and use a suitable degreasing solvent to clean the area. Clean the spark plug too. Stick the plug back in and seal right around plug and cover. If you use black RTV it won't look too nasty!
Very likely that the water spilling out from #1 hole is shorting out the plug wire and causing a misfire/poor running. So, fix that up first then see if the problem goes away.
HTH..............ed