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2002 CR80, water in cylinder?

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Hey guys. I picked up a 2002 Honda CR80 in mint condition with a FMF gold series header pipe and they said they invested a lot of money into it. The owner was a lady, so I am assuming it was her sons. When we checked it out, it seemed to have no compression but the spark plug was loose, took the plug out and kicked it over and a bunch of water sprayed out and it regained compression, a few kicks later and more water in the cylinder. I am wondering if its a head gasket leak, head crack, cylinder crack, or just water in the gas tank? I haven't touched the bike since i bought it earlier today at an awesome deal of $220. Any advice? or things to look for? Thanks

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It's either a head gasket or cracked cylinder, no real way to tell without some disassembly. You still got a smokin deal!

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