1975 3C mark 2,engine oil diluted with water?

Cylinder head gasket has failed/corroded between one of the water ports and an adjacent oil port.
The water in the port is under pressure and the oil port is not. That is why the water is in the oil and not the other way round
You will need a full 'head gasket set' and a Haynes auto manual for your car if you are going to tackle it yourself

Geoff in Wales
September 2009