Originally Posted by TopspeedLowet

It is hard to tell exactly what I am looking at by these photos, but if that is a thin coat of epoxy that was used to seal a cracked block and then painted to cover it up, that is what I would expect to happen. As for the condensate in the valve cover, it could be normal if the oil still looks clean. Most Racing engines run cool and show condensate in that area if you have started up without getting hot before shut down. These could be two different issues, but the block, if it is how it looks, give it a toss in a lake for the fish or dumpster if you are green.
Bruce