396, im not a rookie, but by no means an expert. Ill tell you where Id look and maybe that will help. As for the oil leak, maybe the valve cover? The head does not have any oil passages in it, so I dont think any could get to the headbolts unless it dripped from the valve cover gasket. Does your oil look clean(like when you poured it in? Seems like if water was able to get in, it would continue to get in until you fix the problem. I think the weakest place for it to get in is at the head/intake manifold gasket, but the worst case would be the head gasket. In either case, I think the problem should be addressed with a gasket replacement. As for the headers, you should see a fine mist, not a lot of water. Sounds like you need to reduce the volume getting their, what set up are you running? As for carb/timing issues, I think they are a little dependent of each other. First get your timing set-I think 12-15 degrees BTDC is good, I was told to start low on a fresh rebuild. Then go to the carbs and set the float level. I think it would be good to know the angle the boat rides at when on plane to help set the float levels. After that, you need to set the mixture screws. Been a while since I have done that, so you should probably buy the holley book, I lent mine to my bro otherwise I would write down what it said for you. If I recall correctly, you are supposed to open each one until max idle rpm is achieved. Do each one, one at a time. That should get you running fairly well. As for the correct jetting, make sure both carbs have the same set up. Then you will need to adjust according to your plug readings. As far as being able to read both light and dark-Im not sure I understand, can they be both? I have read the best way to get a good reading is to take it out and run it(after the above mentioned tune items have been addressed, and then slow down as fast as possible (little or no idling) so as not to change the reading on the plugs. Once these things are addressed, and you still have problems, you need more help than I can provide. good luck