Hi Guys
I wish to report that my problem with water in the oil is now solved. A mate came over to give me some moral support to start her up for the first time. It took a few turns to get the fuel into the carby before she fired up.
We have just come back from a nice 20 minute drive and I report that the old girl is purring like a kitten, I am so relieved. I ended up replacing the head gasket, had the head shaved, new thermostat, new plugs and replaced the original head bolts with studs.
In the morning when she is cold I will re torque the head and change the oil again and install the new oil filter. I then propose taking her for a spin to Mt Barker and back a round trip of about 60 Klm's. That should settle everything back as it should be.
Thanks to all you MLU chaps for your advice and suggestions which I followed to the letter.
Cheers
Tony