[Alan Wheeler]

Don't panic about the water. First thing to check is the oil filler cap on the top of the tappet cover. Unscrew and check the underside of it. If it has a lot of grey'ish nasty slimy sludgy stuff, you need to give the engine a good flush. You may need to remove the tappet cover and clean it. That sludge will be at the top of the engine and that should be al you need to do. Give the engine an oil change. You don't need to flush lots of changes through. Don't use that marbvel mystery crap. Just a good oil and monitor it for any sludge build up. I thoroughly recomend Amzoil full synthetic.
If you can easily get the pan off, then by all means do so and give it a good clean. But if you can't, which is the case with most boats, don't panic about it.