D2 (5U) Revival Project-Questions

Hi All! I'm a new owner of a D2, a later 5U series machine. It had been sitting outside, and not ran for approximately 7 years. With some tinkering, fired it back up today! One of the immediate concerns is a puzzling problem. Coolant is being fed out of the pony motor exhaust stack at a slow but steady rate when the main engine is running. The pony motor does not currently run. The machine has been converted to electric start, which is how I started it-I'm unsure of the condition of the pony. 

The oil in the main engine looks okay, I don't see any evidence of coolant in it. The main engine was seized up when I purchased the machine, but not too bad. I blocked the valves open and poured some acetone/atf mix in the intake/exhaust. After a few hours of soaking and bumping the engine flywheel with a prybar got the engine turning.
   

the coolant galleries for the pilot and main are interconnected. i would guess some thing has rusted through. rebuild the pilot or ditch it and blank the ports off it may be a idea to add a couple of air bleed valves to the blanking plate for coolant galleries

be ware of stuck piston rings if the machine has sat and it had seized the rings could be stuck too.

check the exhaust tube for the pilot carefully as they can rust out very easily inside the main intake manifold and dust your motor.

i would change all the fluids just to be safe. oil does absorb moisture and coolant looses its protective qualities over time.

I would guess at a cracked head or cylinder block on the pony motor.

Hi,
another possibility that is easy to check is for a blown head gasket on the pony engine--these gaskets relax after fitment and initial nut/bolt torquing and need to be re-torqued after a few starts and aging after about 20 starts--it is the nature of copper/asbestos gaskets.
You could first try re-torquing if the water entry rate is slow.
To Re-torque back the fasteners of 1/2 of one flat and re-torque to 35 Lbs Feet.
Cheers,
Eddie B.