Engine Cutting Out! What to check?

Performed a sudo cylinder leak test. Set my air tank regulator to about 10 psi and I think every bit of air went into the crankcase. I covered one valve cover hole and placed a small plastic bag over the other hole and then filled a cylinder with air. The plastic ballooned fairly quickly. Then I checked the oil and it looks like metallic paint! Something has gone terribly wrong I think so looks like I may be pulling the motor for a complete tear down.

EDIT:

Scratch that. I'm getting different answers from different people. PO says he thinks there's a hole in one or some of the pistons allowing the blow by into the crankcase. He's positive since I was running the Sunoco 112 that it's causing that problem from detonation (which it WAS doing I believe). But the air I was putting into the cylinder wasn't going in very fast so it's probably a given that some or all of that air would blow past the rings right? One other guy thinks I may have blown a head gasket from the smoke story, but another couple guys say it probably isn't that because you can definitely smell the antifreeze out of the exhaust. I didn't notice any odd smell from the exhaust and the PO is 99% sure that the head gasket will not blow on this motor. He had the cylinders O ringed (not sure if that's the right term) with a copper wire that sits at the top of the cylinder inside the head gasket so that there is actually 4 wires in between each cylinder to blow through. So the cylinder pressures are down 10% from when it was new, 250 to 224 plus or minus 1 psi. I thought that was pretty good but PO thought that was bad and other guys think there is nothing wrong with that and was surprised it had that much cylinder pressure. On the subject of seeing the metallic in the oil in the oil filter, these other guys seem to think that because the motor does not have enough miles on it to be fully broke in, I am possibly seeing residual break in material off the bearings. According to them, the smoke could be from oil getting past the valve seals and the problem could lie within the head (just the smoke issue, not the cutting out). I know it's hard to make a determination without hearing and seeing the problem, but I welcome any more ideas here.