Mmmmm. I am not agreeing that any piston looks 'steam cleaned'; the one looks like it has been wiped clean. And the head chambers look at pretty uniform; if one cylinder was burning water in an amount to steam the piston, it would show up in the head chamber too.
The pitting on the cylinder could be from moisture, or from the bore not being 100%. And yes, L2316's; the little notches in the eyebrows are a clue to that. The coolant in the 1-3-5-7 side of the valley is concerning; that would not come from removing the 2-4-6-8 side head, though it might have come from removing the intake.
Look at the upper center area of the head surface. It looks like there has been some leakage there, based on the feathered markings coming out from the the water jacket hole just to the left of center in that top center area.
Based on the head gasket pattern on the head removed, it looks to me like the head gasket has not been well clamped. Possibilities:
- Head bolts not torqued properly
- Head bolts not re-torqued
- Gunk in head bolt holes preventing proper clamping of the head
- Head bolts stretched
Heads may be warped, or the block deck warped. Same could be going on the other side, so it would be foolish to not remove it based on the head gasket pattern seen on the first side removed. IMHO, it all needs to be checked.
Let us know what you see/find when you drain the oil, OP. And yes, the distributor loose might have been the issue. But the milky oil reports is a concern.
