It is a problem if it's left in there. Odds are that the coolant has already seeped past the rings and is in the oil. 100% straight water, and I mean, 100%, wouldn't hurt anything. It's not good to have it where it's not supposed to be, but it wouldn't do any real damage. Coolant washes oil out of where it needs to be and eats the bearings. As with any motor, take it apart and inspect it, replace if anything even smells like it might cause a problem. It's not a problem if you take it apart, mark where everything goes (rings are seated to that particular cylinder, unless you want to buy rings and a hone), and replace any dodgy components.
Ok, I'll be taking the pan off this weekend to check the oil once I put it on the engine stand. The valves aren't white and neither are the plugs. I can't see any cracks in the heads but I'm not sure
It's common to get coolant in a motor where it's not meant to be while taking it apart, especially if it wasn't properly drained before removal/storage. It's still a good idea to take it apart and inspect it. Hot soapy water/strong degreaser combo would get the block clean if it's super dirty. Or load it into a truck bed and take it to the local self serve car wash.
Take a large sheet of cardboard. Poke holes in the cardboard for the valves to sit in. Mark them for the Driver and Passenger side. Put the valves in order from front to back in the cardboard. Take the disassembled head (remove any bracketry, manifolds, spark plugs, etc), and look at the valve seats. If they're pitted or gacked in anyway that lapping wouldn't solve, just say "f*ck it" and have the heads done up, or buy a set of aftermarket heads. If they're good enough to lap, soak the heads in a tub of cleaner. Purple Power works good. Get a stiff scrub brush, thick rubber gloves, and after soaking for a while scrub the hell out of em until they shine. Scrub them again with warm water and soap, and then rinse and blow dry with compressed air. Hair driers also work, but you look like a damn fool. While the heads are soaking and/or drying, clean the valves on a wire wheel. Again, if if they can be saved. I use a bottle brush style stiff brush chucked in a drill to run through the valve guides to clean up any leftover crap. Test fit each valve to make sure there is no binding or hanging up.
It's really better to take the valves and springs out. One, you'd never get anything out of there that may be in there. Two, since you'd have em apart you might as well replace the valve stem seals, and if you ever want ti give this thing some power, you'll need new valve springs anyway.
I will be getting new valve springs when I get my cam and other stuff. But yeah I know a 350 is better for power but I have a 305
