freeze plugs? could they be the problem?
 

First off im new to rotarys so what exactly is a freeze plug? i just bought an 86' N/A for $700. The motor has water in the oil i know that much because it looks like a chocolate milkshake. i was told that the seller had the car worked on and they had to replace/fix whatever you do to the freeze pugs because they were both messed up. now this was the story the guy told me and like i said i dont know much about rotarys. but then again he also told me to check the head gasket that it could be broken and causeing the problem. I dont know enough about rotarys to know they dont have heads and sure as hell dont have a head gaset. so my question is could the busted freeze blugs be the cause of the water in the oil o do i have a cracked block either way i have a second engine already in it. but im wonder if the old one is fixable so i can sel it or if its not worth it. Thanks

All engines, 4,6,8cyl and rotarys have freeze plugs. In the event the water in the engine freezes, these plugs will pop out as the water expands as it freezes to lessen the chance of the block cracking. It's a very good possibility that the "O" ring seals in the rotor/side housings have failed and yes it is fixable. But keep in mind, it could cost more than ur willing to put in it.

Thanks for the help. i hope your right and its not a cracked block so that if its too much to fix i can still part it out.

If the freeze plug (on any vehicle) pops out, the coolant will go on the ground, not into the oil stream. Did you ever see this engine run? Did it make white smoke out the exhaust? If so it was burning coolant, which means the internal water seals broke. Its supposed to keep coolant out of the rotor. I just rebuild and reinstalled my engine on the RX-7 I just bought cause it had the same problem and the dealers mechanics couldn't fix it and the local Mazda place doesn't have a qualified rotary mechanic anymore.
2 of the last 3 motors I rebuild had this problem and what I found was that the metal that formed the channel for the coolant seal broke away. That plate had to be replaced since it can't be used anymore. A N/A rebuild kit cost like $150. Thats all the water seals, little O rings and stuff for the block. Doesn't have the apex seals or any seals for the rotors. I got a used plate for $35 bucks. Cost and condition on those will vary but they are attainable and the motor is rebuildable.

That sounds like what ive been told by a few people now yet untill now nobody had a way to fix it. the motor ran when i bought the car didnt over heat or anything but like you mentioned when i looked out the rearview it was like a smoke screen i couldnt see a thing the smoke was so thick. its looks like im just gona have to tear it down and check it out for myself since there are a few diffrent things that could have gone bad. but anything is better than a cracked block right?

Freeze plug?? WTF is that:) If there is one on my Cosmo engine it sure as hell didn't do jack SHIT:)
http://www.rx7turbo.com/projectcosmo/cntrhousingbad.jpg