It's weird that there's water pressure in the lump! I have come across something slightly similar before on a nova gte I had. There was a small hole in the bore of one cylinder, right where the water duct was. When it ran it was perfect! Slight water from the exhaust but a normal sign of good combustion. Except if u screwed the cap of it would " gasp". Hence holding water pressure. Don't know if this helps at all but thought I'd mention it!