The water and oil will not mix because the housing you have is made so that it is oil AND water-cooled. The standard S2 hose from the rad to the thermostat housing has a small outlet that goes into the big 90 degree pipe.

In this picture you can see the water hose has a small outlet and that goes to the big 90 degree bend pipe. This is where the water runs into the turbo


You need the pipes and bolts off a S2 turbo unit. But if you have had the hole in your turbo for a long time I would flush it to be sure that no foreign objects are in there and could go into the rad.