Water in oil after rebuild - looking for guidance

I did do a compression check which checked out reasonably good. All cylinders except #7 at 135 psi (opposite side of the engine) were at 150 psi. I haven't pinpointed why #7 was down. There's nothing obvious on the gasket that says it leaked. I haven't pinpointed how the water got in the oil, I assume the crack extends low enough that it got in that way. The ARP bolts do use washers which were lubed at install. Cooling system pressure held 13 psi for 2 days after I tightened all the hose clamps chasing down those leaks, which tells me that it never achieved that pressure while running. Also never had any coolant in the catch can. Cranking the engine did not affect cooling system pressure.