Exhaust water coming back into manifold!!!!

[ricglobe]

Hey everyone exhaust question here... I've had a few atomic four engines and this is a new problem for me. The previous owner instructed me to not open the raw water intake until after I had run the engine for a few minutes and to close it before shutting down the engine or I would get water backing up into the manifold.. I thought this was strange and probably not right but if it got me home I'd look into it later. No such luck. After an hour of running her I found water in oil. I've read the other threads and followed dons advice about flushing a few times and had good results although I still seem to be getting water backing up the exhaust. I've attached a few pics and read the other threads about this riser. Should I just scrap it and go with the traditional 12 pipe rise with the water entering on the back side. Is it an issue with the muffler positioning. If there is something obvious I'd love to know. Also, this engine is both fresh and raw water cooled... As well as running a hot water heater. I should also probably ad, she runs great! And temp stays at 150.... I'm lost!