i had the same problem in the original mazda 526 back in 1979. as onehundred80 said, no fun. head had to magnafluxed and milled to insure it hadn't warped on top of internal engine parts that had failed to the point of needing replacement etc. surprised you haven't noticed plums of a very white "exhaust" running for as long as you did with the problem. it is actually steam and at that point you are cooked. i've never know the water in the oil problem to be anything else but a water leak (from a head usually or internally) that needed pretty immediate attention.