3.5 V8 coolant problem

Hi all
Right got a problem with my 3.5 Carbed V8 when it gets up to temp there is steam coming out of the breather and im not talking a small amount. I have chamges the Vally gasket, re-torqued the Heads down but there is still steam coming out. ive put clean water in the coolant system to see if there is any oil in the water and clear.
the engine runs sweet with no probems other than this and ist just been re built.
What could cause water to be getting in the oil like this or is it just coz its been stood and it will boil away with time?

Condensation??


Or worn rings and it's smoke not steam

the engine has been re built with new rings. im hoping its just condensation but there is deffo a oil and water mix somewear as there is that white scum in the flame trap

has anyone used this ? ive head good and bad things about it

Rover V8 engine crack Head / Block sealer silver seal on eBay (end time 20-Apr-10 14:54:51 BST)

firstly you only need to torque the heads down once!!!!!
is the state opening? is the rad clear did you fit new cooling system parts?
i always replace the rad cap,state, pump and had the rad flow checked when doing as engine

yes new pump, rad,stat. when i was plumbing in the coolant hoses i not no were the pipes from the header tank ran to. i think the main pipe from the header is going to the wrong place as ive seen pics of were the main pipe from the header goes to the bottom hose on the rad. could this be causing the problem. there is no oil and water mix at all