Ya know.... this is right. I looked at my /6 and at a cross section drawing of this block, and 1-2" above the pan rail is well below the water jacket. On the driver's side, the water jacket looks to stop stop just below the core plugs. But, it sounds like the OP found this when doing some coolant checks, so either the crack is higher up than described, or there was some leakage coming from somewhere else that dribbled down into this crack and looked like it was coming out of the crack.