I will disclaimer that the last gsxt engine I had the head off was about an 85 model.
I believe as was stated, as long as the tell tale hole between the water pump and oil pump is clear, if you have a faulty water pump coolant will leak out there before is will go into the oil.
What is the history of this problem? I would suspect it had a coolant loss, low coolant event that lead to an overheat, then to coolant in oil?
I did suggest the proximity of oil galleries close to coolant at the head gasket so I would look at that. Straight edge on the head, you also have the base gasket to look at for a possible leak of coolant into the sump.
Are there sign of corrosion on the alloy parts of the cooling system you have looked at.
The customer stated that the bike ran fine last season, and when he first took it out this season it started overheating. We did not detect any external leaks. The customer also stated that the bike had never been run with water as coolant.
I'm confident that the water pump is not leaking.
Straight edge on the head--While I will check this for good measure, if it were leaking at the head there would be water in the cylinders.
There is no abnormal corrosion on any of the coolant system parts that I have seen so far.
Base gasket for leak of coolant into the sump--This is the first new idea I have heard so far; if the base gasket is compromised that would also result in coolant mixing with oil; I'm very thankful to you for pointing this out--as obvious as it is in retrospect, it was not a possibility I had considered so far. This would give us reasonable cause to continue dis-assembly in order to check the base gasket.
If it's the base gasket, then maybe it's not a crack in any of the actual castings, and maybe we can simply replace the gasket and put it all back together--which would be a much better solution for the customer than having to buy a whole new engine.
We did not want to continue dis-assembly if there was no new information to be gained by continuing, but when considering the possibility of the base gasket being compromised we have a reason to move forward. I will speak with the customer on Monday and let him know that there is one more possible cause that we can check before we make a final verdict.
If anybody thinks of anything else that could cause water to enter the oil, anything at all, please mention it here. At this point I'm simply trying to identify every possible cause of this problem and check all of them, so that I can be sure to give the customer a fully accurate diagnosis.
While I do not claim that we made no mistakes in the diagnosis procedure (a compression test of the whole coolant system would have been a more efficient use of our time than testing individual components separately), we proceeded as logically as possible with the information we had on hand at the time, and I'd like to continue to logically check each potential cause until they all have been exhausted before declaring that it is definitely a crack in the block.
Thanks again folks very helpful and please if anybody has any other ideas for other potential causes, let me know.