Saving Old Seagulls

Before pulling the head, I was hoping to find out if perhaps the water pipe could perhaps be the issue. Isn't that why the backflushed water came out the exhaust and not the water pump housing? I will also try to flush water using the slots on the water pump housing (haven't done that yet). Please ...

I have a 1971 Seagull Forty Plus long shaft that has been in sheds for the last 30+ years. After cleaning the fuel system, replacing the spark plug and cleaning the connectors and points - it sprang to life! Wonderful! 8) Picture attached. I noticed the water flow out the tell tale was not ...