Does he have a heat exchanger or is the engine raw (salt) water cooled?

If it were only water, or water in the oil resevoir, then I'd say elbow, hydrolift muffler, head gasket, cracked cylinder walls, or head (hopefully gasket).

If it were only oil, then you could have a bunch of other stuff (some subsummed above). Leaking pan, drain, sender, head gasket, cracked block, etc.

However, if he's right about both of these items, then the best I think he can hope for is a bad head gasket.

If he can pull the head gasket cover, then maybe if he cranks it, he'll see what's going on.