Okay so here's the deal. I rebuilt a kade for my 240. Shaved .020" from the head to remove warpage, this caused the lower chain to eat a hole in the main coolant passage in the oil pump cover getting water in the oil. Fixed that issue put on a chain guide. Still am getting water in the oil. I've heard of American engines having this issue when using arp head studs. The arp studs go through a coolant passage on those engines. My question is, is it possible for this to be my problem? Do any of the head studs go through coolant passages in the ka block that run coolant from the block to the head that could be causing water in my oil? I'm lost. Any help is greatly appreciated. Thanks.

I may be mistaken but I dont think the head bolts go threw the coolant passages. I'm building my ka at the moment and havent paid to close of attention to this but heres my question. Why was your head warped? Did it over heat? If so did you have your machinist check the head for cracks? This could cause coolant to get places it doesnt need to be. Most good machine shops will check this before waisting their time decking a head if it doesnt need it.

I bought the engine with a blown head gasket, so I had it resurfaced.

Hmm.....
So did your machine shop check for cracks? This is a very important step. Its seems like you already have your engine assembled so this would suck, but if I were you I would bring the head back and have them check for cracks. Also did you have them deck your timing cover with your head?

I did not I totally spaced it. I'm trying to find time to get it apart and take it back to him I don't think he checked for cracks he had it for less than an hour