The water in the hydraulic doesn't concern me too badly, although it needs to be changed asap. My TO 35 had about 2" of watery sludge in the bottom of it when I got it, but it didn't hurt anything. As long as your 3 point still works right now you're probably fine. For the engine, I would see if there is any water in the motor oil......that would be a giveaway of a head gasket, or potential crack. Is there an oily "film" in the antifreeze when you look in the cap?
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