rmx 250 problems

i just bought a project 1990 rmx 250 last week.the previous owner put a new topend on the bike and then couldn't get it to run. it was getting water in the cylinder. so i figured he messed up the head gasket or base gasket. turns out it was the base gasket. i replaced the base gasket and head gasket. along with changing the trans oil and cleaning the carb etc. the old oil did have some water in it. now that it is back together i'm getting lots of water in the trans as well as oil in the pipe. i'm guessing all the water in the trans pushed the oil into the powervalve an out the pipe. what should i do next? is there anyway for water to get into the oil through the powervalve? any help would be appreciated

i think i have it narrowed down to the waterpump seal

its definitely tranny oil in the pipe. i took off the pipe and filled the rads with water and couls watch the water/oil mix run out of the p/v. its coming up through the channel where the linkage is for the p/v is.

yep. pulled the side cover off and plugged the waterpump port. then dumped water in the hose on top of the waterpump and it tricked out on the tranny side of the cover. will be installing a new seal after lunch.