Water in crankcase

I think its more likely that the liner o-rings just failed, not related to freezing. It happens fairly often.

I have had lower liner seals let go suddenly when I washed out the sediment that had accumulated in the bottomm of the block and an oddball cause I had later on the same D6 was a rusted out freeze plug under the valve cover. Just got lucky and found that one when I cranked the engine up with the valve covers off. I should have suspected a leak up there because of the amount of liquid water laying on top of the head, but at the time I believed it had come out of the oil and water emulsion that was stuck on everything under there. When I cranked the engine up, it started spraying coolant through a tiny hole I most likely would never have seen.

Since you are already into it that far you cannot pressure test the cooling system to find the leak, so you will have to do a very close inspection. If you find a clean combustion chamber on one cylinder, suspect a leaking precombustion chamber or seal washer under the chamber. The coolant flashing to steam cleans all the carbon off the head, valves and piston. You may be able to take off the covers on the side of the block and see where coolant is dripping down from a cylinder. Could be seals or a pitted liner. I had good luck sealing up the leaking seals with a radiator stop leak. That would not work on a pitted liner.

on the D8800 eng the first place to check is for a cracked head the 2nd is the rubber seals in the head gasket they get hard and crack over time from the heat and these will let water into the oil . on my 3TD7 that was the problem while the heads were off I had them checked for cracks and also check the liner protrusion they need to stick above the block close to even on all liners if u have one low it could be working up and down and this will let them leak around the liner seals. if you are close to the Indiana side I live about 45 miles east of Terre Haute and have a 4TD7 tore down in the shop right now I could show you what to look for. also the precups and rust thru and leak but as a rule they only get water into the cylinder and will burn the water or hydro lock the eng

Well after doing some looking there was only water in the block no antifreeze what so ever and I see I have a exterior crack on the block next to the front cylinder closes to the blade which can be welded but if the water froze in the block would have it pushed the lower sleeve gaskets I have both heads off now don’t see any problem with the sleeves I don’t believe that there was ever water getting into the cylinders either. Heads from what I can see look fine to me it almost has to be a crack in the block internally or the sleeve o rings have given away

Very good chance of an internal crack also. I would be shopping for a good used engine.