1997 F150 5.4 V8 w/ approx 200k miles. I've got coolant in one of the cylinders. My questions are many, but I'll keep them to a few:

Does this mean my engine is shot?
I've got a great shade tree mechanic whom I trust.. or should this be handled by the dealership?

Any expert/knowledgeable opinions/advice/suggestions on what to look out for when repairing and the proper way to repair are wanted, please.

I'm trying to be brief, so I hope this makes sense.

 

Did you run the engine for any length of time with water in the cyl?
Without removing the head how do you know you have water in the cylinder?

 

Unfortunately yes, I have run it with coolant in the cylinder. We pulled the plug to verify. You can smell it. This has been verified by 2 different mechanics. The 1st one I was not present and I didn't trust him so I took it to a friend. He verified with me present.

 

Just curious which cylinder has coolant in it?
By any chance could it be located under a heater hose? If coolant is leaking from the heater hose and ends up pooling in the spark plug hole it may be possible to find a small amount of fluid in that cylinder after pulling spark plug - IF - the coolant wasn't blown out before pulling plug! Would be worth a check before spending the bucks and time pulling a head.
Just thinkin' out loud...

 

You might be able to save it if you don't drive it anymore.
You will need a head gasket job most likely.
Depending on how much or how long water has been mixing in the oil, Might be a good idea to replace the mane bearings wile your at it.

I ruined a piston by running on a bad head gasket so don't drive it.

 

14 years old and 200k miles... what is it worth ? If you have water in the cylinder and come up on compression, you can bend a valve or connecting rod. If there was not that much water in the cylinder, you might be o.k. I had a similar small leak in a head gasket and used Bars Leak head gasket sealer a year ago and working great. Your truck and your money. I will post what i used. First time i drained, flushed and use the sealer... 8 months later a redeveloped a small leak. Second time i use the copper sealer that you put into the antifreeze and leave it there forever. Sealed up in 10 minutes and new problems can not reappear since you have the sealer in the radiator forever.

 

Bar's Leaks Liquid Copper Block Sealer