Sounds like the head gasket to me.

Any noticeable loss of power?

Or crack in head, or crack in block. None are good to have.

Wouldn't there be water in the oil if it was a cracked head or bad head gasket?

I wonder is there is an engine oil or hydraulic oil inter-cooler in the radiator or an oil cooler water jacket core attached to a radiator/coolant plumbing somewhere that has ruptured internally. The elevated coolant pressure is suspect to me.

Just asking

Depends on the pressure differential. Depends on where the crack is.

I agree it would depend on some variables.

Maybe pocketchange can tell us if there is water in the engine or hydraulic oil, I'm still curious.

Hopefully either way he will let us know what he finds out.

It is more common to get water in the oil rather than oil in the water. It's more a question of viscosity than pressure. The viscosity of the coolant could be as low as 0.3-0.4cps at operating temperature, whereas the oil is still likely to be well over 1.0cps. This makes a big difference to the amount of pressure required to force the fluid through a small crack

You could get oil into the water at start-up, when the oil is pressurized but the coolant is not. But then you would also get water into the oil at shutdown, when the coolant is still pressurized (and very low viscosity) but the oil is not.

If you are only getting oil in the water, and not vice-versa, then something unusual could be happening, and it might not be a blown gasket or cracked head

There are lots of ways to pin point the issue at hand. But, in reading your question I would 1st say, when ever you are working on engines of any make or style and have to remove a head, intake or other major component, new bolts are mandatory. You don't say why you had to removed the head 2.5K hours ago, nor do you state when the oil and water issue began. I assume it is correlates to the head removal. If so I would cough up the money and have a Cummings repair person make the needed diagnose and repair. You will be money ahead.

Well I went ahead and pulled the motor out of the tractor yesterday and took it over to Cummins Southern Plains in Houston, they should start on it today. I'll keep ya'll posted on the damages. The mechanic told me yesterday that they have new updated liners they can use. He said this motor is bad about blowing head gaskets at the fireing ring and the new liners have a different head gasket.

The reason I pulled the head off 2,500hrs ago is because I spun a rod bearing at 5,000hrs. I could not believe it. I change oil every 250hrs and use shell rotella 15w40. I was not operating the tractor when it happend, so I pulled the motor, got a new crank, new rings and 1 rod, liners all looked good, so put everthing back together and installed back into tractor, fired it up, and low oil pressure (15psi idle-25psi high idle). Ok, so then I had to pull the oil pump and dicoverd the pressure spring in the pump was bad, by the way, you can't buy just the spring. they tell you in the service manual how to test it, but if it's bad you have to buy the whole $2,000 pump.

Thanks for all the positve comments and remarks, I'll let ya'll know what happens from here.

Good luck. If it's the head gasket, that'll be the cheapest to fix. Of course, cheap is a relative term.