My guess is over cranking. There is no
oil cooler on this model. I have to heat the glow plugs for 10 seconds, longer if really cold, before cranking. I never crank more than 5 seconds, then stop, wait a minute, hold the glow
plug switch for another 10 seconds, then crank for 5.
Change the oil and recheck it, drain again if necessary to get the
water out of the oil. Keep changing the oil until the
water is All gone.