[trularin]

Pressure test the coolant system.

Get a pressure tester and pump to 15 PSI cold. Let it stand over night. It should be 15 in the morning if everything is sealed.

Okay, so you test and it hold pressure, the water forming could, and I stress could, be condensation. The steam or smoke coming out of the breather could, and I stress could, be blow-by.

Pressure test works on cold engines, it is possible to have a thermal crack. One that opens when the engine gets hot. Seen many of these on GM.

It is possible you have a leak. Here is another one, fill the coolent system all the way up with a T'Stat. run the engine without stopping for an hour. Let it cool and check the level, if it is down, pull the plugs and check for water burning in a chamber.

Hope this helps.