It looks like water. Was it just water or was it antifreeze/coolant. Is it exactly the same as what was in the radiator? Mighty intersting that it is in both sides of the engine, kind of a big clue there...Hummers have a way of making the driver try to drive through too deep of water and hydrolocking the engine. It's like a magical power they have. Beware of this on your test drive -haha.
When you took apart his cooling stack, how bad was it between the radiator, oil cooler, etc in the stack?
If it is coolant- first cylinder to look closely at is #8.
With the unbalanced waterpump and the added heat load that hummer have from the junk radiator angle, then the turbos have the uppipes right next to the head of #8, there is a huge conspiracy in the hummer world that all 6.5 engines crack there due to a casting defect. It is a weak point because of the waterpump, but once the balanced flow one is on the failure rate goes way down.
When you put in his new engine, upgrade the waterpump to the spin on fanclutch style. Get the kennedy fan clutch and the duramax fan. Trim the fan blade down to 20" diameter. Get Leroys bypass restrictor fitting for it. You'll need a lower hose metal tube for a 2000-2004 hummer, or add the extra connection for the new location of the other heater hose. Search parts picture difference and you'll see easily where to weld it in.
Hummers need same basic upgrades as pickups- ops relay harness (again Leroy if you cant make it yourself). Fuel pressure gauge and LP upgrades etc.
Hummers have their own relm of upgrades and mistakes (some rip off stuff as well) made by many hummer specific suppliers- warn your customers of this.
Also he/ you REALLY need to learn about the locknut issue on the geared hubs. It has caused many deaths and injuries. Loosing a wheel and spindle has caused more rollover incidents in on road driving than AM General or the military will ever admit to.
Btw, how fun was pulling that engine?!? What a major p.i.t.a. Huh?
Be patient when realigning the cooling stack- usually takes some wiggle work. Put the hummer against something or chain it to something immovable, in both forewwrd and reverse load the engine full throttle a few times. Fan against shroud clearance is usually found this way. I know, your thinking "but the owner will never try to push something immovable, especially in reverse." Yes. Yes he will. Magic power #2 of hummers...
Check trans, both differentials, and all 4 geared hubs for water. They all have vent lines, but if it went crazy Ivan, they could all have water... in fact fuel tanks also.
Keep us informed plz.