1971 Demon with some coolant issues

If the car was outside but had glycol in the cooling system I would suspect condensation to be the water in the oil problem. Especially starting it only periodically and warming it up. Engines can get quite a bit of condensation in the crankcase when only started occasionally. The suggestion to change the oil and watch it is a good one. Drive the car if you can, just sitting there idling will not warm the oil enough to vaporize the water in the oil.