Leaking compression into the cooling system doesn't mean you will have water in the oil or oil in the water, and as a general rule doesn't happen in Fiat SOHC engines, as the oil and water galleries are quite separate.
A leak down , or cylinder leakage test is "the" definative test to diagnose several engine problems.
The device I use is a Snap-on (MT324) cylinder leakage tester.
I have four flexible tubes which are screwed into the sparkplug holes and seat on an "o" ring. On the other end they have quick connectors to attach the single hose outlet of the MT324 into.
The MT324 has a regulator, which is used to zero the graduated scale. This reads from 0 to 100%
Regulated air pressure, which is being supplied from an external source (mine being a compressor at 90 psi - but I have seen them run from bottled air.), is fed thru the regulator and thru this gauge then on into the engines cylinder via the spark plug hole.
The piston of the cylinder being tested MUST (repeat MUST) be at TDC (ignition).Removing the cam covers to see the position of cam lobes makes this job easier too. When you have the engine at TDC, put the car into gear and apply the handbrake to stop the engine rotating.
On engines that are leaked down often, (like a race engine) simply mark the flywheel (x19) or the front pulley (124) to have a notch opposite the original timing mark. this gives tdc for 2 and 3
The gauge indicates a % loss of the total pressure being supplied ,ie thruput of air... no thruput = no loss (the Snap-on device will work from 40 thru to 90 psi supplied pressure.)
The Supplied air can only leak :
A: past the intake valve... open the throttle butterfly and you will hear this, Only zero leakage is acceptable here
B: past the exhaust valve..... ear to the tail pipe.... small leak and you will hear the ocean .. like a seashell.... bad leak more like a howling wind! Once again only zero leakage is acceptable here too.
C

ast the ring pack and into the crankcase..... you can listen to the breather hose, see the plume of oily smoke sometimes. On some occasions you will hear it howling back up the oil drainback passages thru the camboxes!!! you will never get this to nothing!!! its physically impossible! but you can get very
little.... this is important....and one of the secrets of engine building!
actually there is nothing secret its called preparation!!
D: past the cylinder head gasket and into the cooling system....you MUST have the radiator header tank (124) or the remote (x19) filled to the brim. ( move the small drain pipe up for an x19)
note: a very small leak may not appear as bubbles in the radiator on all cars.!!!!
the air instead, may simply displace some of the water that is there.... forming a pocket in the head possibly...so you must fill up before you start (a tip with dohc is to check cyl 4 first 9/10 of head gasket leaks are here!!) and you will see coolant overflow, if any air is getting in there. Sometimes it can look like a geyser from the top of the radiator so beware hot fluids!!. Results of this can be nasty so hopefully we all never see this!!
and finally
E: past the gasket and and into an adjoining cylinder....I have four flex extensions , so I simply put a dob of spit on the end ... like a car tyre valve check.....if it bubbles up you've found the problem... sometimes between 2 and 3 on 128/x19 sohc I have found this .
You can also get a pretty good idea with a simple fitting (no gauge) that supplies compressed air thru the plug hole... any leakage will still be audible / visible, but you wont be able to quantify how much is leaking as a %age.
SteveC