Water in Oil

There is ZERO CHANCE that much water is from condensation. Since it does not seem to be coolant, someone PUT IT THERE in my opinion.

Either that or the engine was somehow in a place where water dripped / spilled/ rained into it, or the block (cooling passages) someone put water in there (and forgot) and it actually DID leak from the cooling passages into the pan..........in which case you have a problem......intake gaskets, timing cover / cover gaskets, or a block or head problem.

Really? Wow, I didn't think that would be the case. It definitely didn't get rained on, it's been inside the whole time and bagged. I did hose it down when I painted it (after I cleaned it) maybe I didn't plug all the passages?

Well I'm gonna run it and keep an eye on it. So I can just refill with oil?