It can't be the modine because it has a misfire and a piston crown has been steam cleaned , if it was the modine you would solely have oil/water mix, I must say I had a 205 with a pin hole in a bore that when the piston came up put water in the sump and when the piston was down put the water in the bore so you may not have a head issue but a block issue, best bet is pressure test the built engine and drop a bore scope down before you strip it