Marine: Boating, Sailing, PWC, GPS and Navigation - Water In Oil

DURING THIS WINTER WHILE MY BOAT WAS SITTING, THE STARTER WENT BAD AND AN EXHAUST MANIFOLD CRACKED FROM FREEZING. WHEN I NOTICED THE MANIFOLD I IMMEDITELY CHECKED THE OIL FOR WATER AND THERE WAS NONE. I REPLACED THE MANIFOLD AND STARTER AND STARTED THE ENGINE FOR THE FIRST TIME THIS SPRING. AFTER RUNNING FOR A WHILE I NOW HAVE WATER IN OIL. I'M NOT SURE ABOUT IF A WATER JACKET CAN LEAK THRU THE MANIFOLD (MAYBE I DID SOMETHING WRONG) OR IF I FOR SURE HAVE A CRACK IN SOMETHING. IT IS AN 89 GLASTRON, 4.3 LITRE MERCRUISER. IF YOU FEEL THAT I CRACKED SOMETHING IS THERE ANY DIAGNOSIS TO DERTIMINE IF IT IS A HEAD OR A BLOCK WITHOUT TEARING IT COMPLETELY APART. PLEASE GIVE ME ANY FURTHER INFORMATION DEPENDING ON WHAT YOU THINK IT MAY BE. I.E. BEST PLACE TO FIND HEADS OR BLOCKS, COST, WORTH REPLACING OR NOT.
THANKS!!!

You don't mention whether your engine has a "closed" (uses a heat exchanger, expansion tank, and coolant for cooling) or an "open" (Get's cooling water directly from the lake) system.

I'll presume you have an open system. If it froze enough to crack the minifold, it indicates to me that you didn't drain the cooling system when it was set up for the winter.

Residual water, from the last time it was run, collects in various passageways in the block, and when subject to freezing, expands, and ultimately cracks the relatively brittle cast iron block.

The head gaskets are the usual culpret when water is found in the oil, but that is more from overheating than freezinbg.

I fear that your block is toast.

To check one of the more common places for cracks, pull the heads and inspect the walls of the cylinders, between the waterjacket and the cylinder.

If you don't find cracks there, reinstall the heads with new gaskets, and have the cooling system hydro tested. That will provide evidence of hidden cracks.

If there are cracks in the block, here's nothing for you to do, except to replace the engine.