Water in my oil filter???
I have a 78 T/A 400 6.6 that has been sitting for about 5 years. I am about to start
restoring the vehicle and when I went to pull the oil filter, it was full of water...I'm hoping
this doesn't mean I have a cracked block, but given the cold winter it is entirely possible.
Fill cooling system with water and do a pressure test on the system. If pressure holds you should be ok but if pressure drops you will have to look for where the water is coming out of it. Your local auto parts store should have a loaner pressure tester you can borrow. (Auto zone).
After sitting 5 years it may be condensation. But if no one drained the block before storing it, a cracked block is possible, but in most cases the freeze plugs burst first. I agree with dandyoun, and also do a compression check. Oil each cylinder thoroughly, Run 110 pounds into each one just after BDC and watch for pressure loss. A good way to know you're just past BDC is to watch the distributor rotor. When it's pointing to one terminal, the next one in the firing order is the cylinder that's just past BDC, (just starting the compression stroke) and so on. Good luck! I'm betting it's condensation.