Water in oil after rebuild - looking for guidance

I'm pretty disappointed, I'd like to know if it was something I did or it was like that when I assembled the engine after machining. I opted out of the magnaflux at the machine shop. This engine had 5000 miles on it before showing any signs of an internal coolant leak.
Did you chase the head bolt holes out with a tap before assembly? If there was dirt in the threads, that may have caused it.