Help!....om636

Trying to help out a friend w/ medical problems on his boat diesel, an OM 636 four cylinder thats been marinized. After going through the whole starter and fuel system, got it started, and within seconds as the oil system pressurized it started gushing out gray oil out of a tiny orifice at the back of the engine where it has no business coming out. Also started coming up the crankcase breather hose into the air intake obviously getting water into the oil somewhere; cracked block? shaft seal on the water pump? head gasket? Any help would be great. Engine actually ran fine when it caught, not rough or uneven.