To check for water getting in the cyls:
disable the ignition
remove all the plugs
Get someone to crank it over while you watch or hook up a remote starter switch and crank the engine over. If water is getting into the cyls you will see it shoot out of the plug holes. Also look for rust on the spark plug side electrode and an orange cast to the center insulator. Sometimes it will be a fair amount of water but not enough to hydrolock it, sometimes just a mist that you can hardly see but will cause rust on the plug side electrode.
Is this the same side where the cyl head had the water issue?
I had water in the cyls too from 2 blown HGs but did not have steam out the exhaust. How is your exhaust manifold/elbow temp? You can get steam from a slightly overheated exhaust system on one side due to low water flow.
even tho its an open system, there are ways to check for water getting into the cyls. What you are actually looking for is the inverse (combustion gas getting into the cooling water). I rigged up this to verify that I had a blown HG or cracked cyl head (turned out to be both). Watch what happens at the end.....next post....