Weather or not its water or exhaust, the manifold is leaking due to bad casting. If its exhaust, you still have a leak, which will make the engine run just as bad. In this case, it was easier to find due to the coolant.
How would you like to track down a poorly running engine problem when it's sucking exhaust back up through the intake casting?
Dad bought of a set of aluminum heads for his Pontiac, we pressure tested them before installing because of what we had read about them. Using soapy water and air pressure, they looked like a foamy sponge with all the casting holes. It took two more heads to get a set that didn't leak. From what we learned, it's all about the quality of the aluminum being used in the casting, in this case it was mostly recycled, they have since swapped foundries and solved all the problems.
Joe
