[bestgenman]

It doesn’t appear you have water in your oil.  As has already been stated, if there was water in the oil, a “snot like” substance would form on the bottom of the fill cap and the oil could appear to resemble chocolate milk.  Although, you may haven’t run it enough for these indicators to form.  As Richard said, pull an oil sample.   Run the engine long enough for the temp to come up and circulate and then take your sample.  Use a turkey baster with an extension tube to get into the pan area.  

If the sample comes back showing no water (coolant) , you have a blow by situation.  Blow by is compression leaking past the rings.  George knows a lot about series 60’s as does Julius,  perhaps they could chime in with their thoughts.