new engine smokes

I recently rebuilt a 350 ci small block chevy. The it has been bored and stroked to be 385 ci. It has edelbrok heads, intake and carb. Also has hooker headers with side pipes and a moroso 6 quart pan.

When I went to initally start the engine it had no compression. A friend suggested that posibly the rings weren't sealing and that putting trans fluid in each cyclinder would help. I tried that and it didn't help. Turned out the valve lash was too tight and the valves weren't closing completely.

Now the engine starts right up and runs smoothly however I have a light colored smoke and water coming from the exhaust on both sides. Both the water and the smoke clear up after about 10 minutes of running. I checked the dipstick and the oil is clean with no sign of water. Also the radiator doesn't appear to be losing water. The engine holds good oil pressure and does not overheat.

Does anyone have any ideas? Thanks in advance.