wrong o-ring on the oil pickup tube so it was sucking air.... looks like the oil we poured in it flushed out some more water from the engine and was mixed in the pan... aaaand it looks like someone threw a handful of top soil in the engine from all the oil deposits, etc that got knocked loose and down onto the windage tray, crank, and into the pan...
all that being said, and knowing it's nowhere close to ideal, HHP is going to clean it out as best they can, re-assemble it with the correct o-ring, check for oil pressure, and if that's good, perform a couple more oil changes to get as much crap out of the motor as possible... the way i look at it at this point is that it *could* be fine and run for a while or it could go tomorrow... might as well give the motor that is in there a chance and save my pennies for a 408 or similar down the road... the bright side is that i didnt really see any metal or babbit in the stuff that got knocked loose and none of it got sucked back up into the oiling system since there was no oil circulating... fingers crossed
huge thanks to Jamie and the guys for staying late tonight to get us to this point