I have the head off now and can see what has happened there. Water leaking into #2 when stationary filling cylinder and intake and blowing into water when running. #3 compression leaking into water system only I think.
Overnight the oil level rose and there was a couple of pints of water in the oil when drained. The cylinder head has 2 cracks and they have been there since we had the Gaz, but this time I think we'll have to get a new one or can cracks be repaired.
We have been losing water since 5 years ago and I sort of hoped it would go away after the re-build (wishful thinking!). When putting the head on last time a stud sheared, I took head off again, put in new stud and re-tightened. None of that would have helped! I guess/hope that water could leak into oil via pistons and valve guides?