I just received a call from the shop and he said when he pulled the headers off to remove it from the dyno he could see water was coming out of 5 of 8 exhaust ports where it appears the exhaust seat may have been cut too large. More to come.
Funny they did not tell you that there is a coolant leak issue when you picked up the engine. In any case the engine "water" issue should have been properly diagnosed prior to removing it from the dyno room.