360 water problem

I am new to engine rebuilding. The motors is a 1977 360 out of a RV. The motor had 29k miles on it. The oil looked ok, not milky or gray in color. I left the pistons and rings alone and did not touch the crank. I installed a new cam, lfters and reconditioned heads. New gaskets and new intake. I motors sounds great, no ticks or knocks. There are signs of water in the valve covers, the oil on the dip stick looks ok. I dont know if I did something wrong or maybe the block is cracked. Any ideas, thanks....:banghead: