01 s type 4.0 V-8 engine failure ?? help ??

Long story , wife last year got motor very hot, cause of radiator overflow plastic tank cracking, low on water kept driving till motor jumped time, (plastic chain tensiors) , I saved for 7 months to purchase used $4000 engine long block, almost 1 year later, got new/ used engine (60,000 miles) got it installed a few weeks ago, so far so good engine runs great. Wife kept saying when can she have it back? she now been driving 1 week, DAILY i would say keep a close eye on gauges, Till today big rains , some flooding on roadways near her office, She drives the jag through water that I can only guess was less than 2 feet. She calls motor is making terrible noise, I go pick her up and check out the engine, I cant believe it, but puddle of oil & water mixture under engine , ( call it baby puke) water oil mixed. engine sounds horrible, loud,  noisy , maybe exhaust , i will tow it home tomarrow, what do you guys think , head gasket ? worse , like i told her aluminum engine doesnt like getting a bath in cold high water?  My thinking another engine replacement, How do i check for root cause ?? Look at plugs first ?? 
 
If i have to replace engine will a newer engine 4.2 be compatable replacement ?? with wiring harness and transmission. Im open for any advise ? my cell is 812-430-5744, thx Scott

Maybe she smoked something under the water. The sump might be compromised and she drove it until it fried.

She really needs to know when to shut a motor off. My wife is the opposite. She hears things that aren't there.