pretty much one of the most common symptoms of head gasket failure - if its got lots of steam even when warm commin out of the exhaust then thats a bad sign of failure, if its got a missfire with water in the cylinder/plug but compression fuel n ignition are good then thats another bad sign

the other is water n oil mix but sounds like you have just got a leak between the cooling system and a cylinder

when the heads off, obviosuly do a skim, but make sure you check that the block sint pitted around the water holes - common thing is to have a head gasket n skim n the problem still being there cos the block has been eroded away!