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Early-on in this thread you said it was boiling, or "bubbling", out of the resevoir yet the gauge read normal. That's why I immediately mentioned head gasket, even though I was hoping you would find something easier to remedy it.
If it ends up that you have to pull the head, I would think that you want to bring the engine up to TDC, then lock the cams in that position before disassembling. If the crank remains at TDC, yet the cams are allowed to wander very far off their marks, you could possibly ding a valve without even trying. And certainly you want to make sure the crank and cams are in the proper relationship before you drop the head back ON again or else you might be bending a valve (or worse) as you torque the head down.
Have you checked the oil level to see if the water is leaking straight from the water jacket into the oil passages? If it's not, then it's likely going into a cylinder where it then burns up and/or gets pushed out of the exaust valve when you crank it.
A compression leak-down test could be very telling at this point. You could apply pressure to each cylinder through the spark plug hole and see if it causes bubbles to escape through the coolant resevoir.
Good luck!
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