I took a 302 out of my 71 Mustang and gave it to my brother for his 68 Fairlane since it was a 302 car and he needed a motor. It sit in a shop dry, no oil or water for about a month then I put it and the tranny in his car. Hooked up everything, but it was still dry and not locked up. He was supposed to put oil and water in it, but he didnt until a few months later, and it was sitting outside,but covered up. When he finally put oil and water in it, it wouldnt turn over, so used a lil Marvel Mystery Oil on the pistons and got it free. He cranked it every other day after that. Well he changed his oil in it today and about a gallon of clear water came out before the milky oil did. What could have caused this. I was thinking cracked block, heads, but the water was clear and we put green antifreeze in it, would the color seperate out of it? I pulled the valve covers and there was more water on the drivers side than the passenger like some one had poured it in there. The motor isnt locked up though. Any ideas how all that water got there?

 

Has it been humid, Hot & Cold?
Condensation can ruin engines or at least make the oil milky

 

Been pretty cold lately, around 30 .