I'm a little worried about my supposedly low mileage '93 B230F replacement engine. First I noticed some scrapings in the intake side of the head.
Intake

Then I wanted to check the health of the oil and noticed some filmy stuff under the oil filter. I then drained the oil. The guys at Autozone said there is definitely water in the oil. I do not know how long it's been since the last oil change.

Then I showed them pictures of the block, where half is wet and the other half is dry.
Wet block

I forgot to take a picture of the foamy stuff under the oil filter, but I took a picture of the oil filter draining out.
Oil filter draining

The last complication is that the car this engine came from was rolled. Is there any way for water to get into oil if the car was upside down?

My plan is to go talk to the guy I bought this from on Monday. I also got an oil test mail off bottle kit from a truck stop. Finally, I am going to try to find a shop to do a leak down test after telling the guy I bought it from that I'm going to spend the money to do this. I'm not familiar with leak down tests, but I think it can tell me that the headgasket is bad.

Another thing is if the headgasket does need to be replaced, I had an understanding from the mechanic that the reason I should buy this lower-mileage (100k) engine was so I didn't have to do a headgasket job. It was also one reason I paid what I paid for it.

If it weren't for the foam on the oil filter I would not have known any better about the oil - I didn't know what watery oil would be like.

Can you all confirm the diagnosis or offer tips on how to approach the guy I bought the engine from?

Thanks,
Nathan