All cylinders filling with water

Ok so now we know they are cosmetics. What procedure if any was done to accept the gaskets. Some guys have trouble getting the cosmetics to seal if the block and head finish are not machined smooth as a baby's butt to accept them.

I totally disagree that he intake is cracked. As mentioned by a lot of guys already, the M1 only has the front water passage and it would leak into the lifter Valley filling the pan with water. You would have to do a really junky job installing/sealing the intake for it to leak. If the block and heads have both been milled you may have needed to have the intake milled to fit correctly.

Are you cleaning the head and deck surface good before installing the gaskets? No ARP lube on the surfaces? Even still if you didn't I don't believe all 8 cylinders would fill with water.

The water pump assembly would not fill the cylinders with water, pan yes, cylinders no.