Help! I'm looking for ideas on where/how my B20 IT race engine is pumping oil into the water and vice-versa.

Background:

Engine #1, consisting of short block #1 and head #1, was doing fine until it developed a noticeable vibration during qualifying for the May event. The cause of this vibration was eventually traced to a sizeable piece of the #1 connecting rod having left the confines of the block. :(

This left short block #1 in need of replacement, so after much searching, a .030 over, blueprinted and balanced short block (used 1 season), was located and purchased from a reputable Volvo IT racer/engine builder. New rod bearings were installed in short block #2, head #1 was bolted to it, and we were off to the race weekend in July. This newly mated assembly ran like a bat out of you-know-where, but unfortunately after the race weekend (about 90 racing miles), we had several tablespoons of oil (Redline 40w) in the radiator overflow bottle, while about a pint of coolant (plain water and "Water Wetter") was missing. About half of the missing coolant was found in the crankcase ventilation catch can, apparently having entered the crankcase as water, then boiling off and evaporating to said catch can.

Upon return to the shop, head #1 was removed and taken to the machine shop to be checked for flatness, partly based on evidence of minor combustion leakage between the 2nd and 3rd cylinders. Sure enough, the shop had to shave about .015 from the head to make it flat. Although there had been no hard evidence of any unwanted oil or water movement at the head/block interface, we hoped the warped head had in fact been the cause of our unwanted fluid exchange. Before the head was reinstalled, block #2 deck was checked for flatness and found okay.

No joy. Before we even got to the track, we saw evidence of oil and water being exchanged, during engine runs in the shop. We went looking for block sealer, used it in accordance with the instructions, and headed for the track. Better... much better... after the August race weekend was over, there was just a trace of oil in the catch tank and very little loss of coolant. At this point we decided to leave well enough alone and run the last two race weekends of the season as-is. We got away with it, but by the end of the October weekend, using the original application of sealer, we were again exchanging/losing fluids in pretty much the same amounts as originally noted. Apparently the sealant is washing away, or possibly the defect is getting bigger... I suspect the former.

Working assumptions:

At this point, let me pause and relate my theory of what is happening here. I believe there is most likely a single defect (probably a crack) that is allowing the exchange of fluids. With the engine running, oil pressure will be higher than water pressure, so oil will migrate into the water system. Conversely, when the engine is shut off, water pressure is higher than (zero) oil pressure, so water seeps into the lube system for a period of time. Obviously, assuming no leakage at the head gasket (which is true, based on careful inspection after the most recent disassembly), this theory would also assume the defect is located between a pressurized oil galley and a water jacket. Zero pressure, or "splashed", oil is just not going to enter and pass through a defect that must be, based on the amounts of fluid being passed, pretty darned small.

Current Status:

With the racing season over, the only prudent thing to do was pull the engine and, as a starting point, disassemble the short block and have it pressure tested. (We went after the block first, as the problem appears to have been imported with the mating of head #1 and block #2.) This block pressure test was accomplished on Friday, and the good (or bad?) news is that there was absolutely no leakage found. Also, the obvious areas - where pressurized oil flows next to a water jacket - were NDI'd with no defects found.

Next:

The head will be similarly checked on Monday. Incidentally, these pressure checks are done by sealing off all orifices in the cooling system and pressurizing with water at 50 psi. But I just have no faith we're going to find anything wrong with the head, so I'm looking for any ideas, theories, or direct experience with this problem. No response will go unread!

Thanks in advance,
Gary L.
--
1971 142E ITB racer, 1973 1800ES, 2002 S60 T5