I have a 1982 Formula with a Mercruiser 260 v8, which I bought the first week of April and fired it up on muffs and let it idle for about 20 minutes to let it warm up. The temp gauge held steady at around 140 degrees, checked the dip stick and no signs of milky oil so called it a day. Over the next few weeks i started it up for a few minutes at a time trying to fix the tachometer and voltage gauge along with a few other minor issues. Well by the 3rd week of May i had it in the water and took a few short trips on the lake. I had a issue with a leaky thermostat housing and also a noisy gimbal bearing so i pulled it out of the water. I got it home and happened to look under the oil cap and noticed milky oil so i pulled the dipstick but that looked fine. so i figured it must be all the short runs i have doing and causing moisture under the valve covers. Well today i get around to fixing the thermostat housing and decide to pull the valve covers to have a closer look. I didn't what i saw so i said hey if i am screwed might as well pull the intake. here are the pics. I do remember after the first day i fired it up in April about a week later the outside temps dropped to about 28 degrees for a few hours so maybe i screwed myself by starting it up too soon this spring. Looking at these photos do i have a cracked block, head, intake or exhaust manifold or is it excess moisture from short runs on the motor.