I have a Case 480C tractor and noticed water leaking from the head bolt (not the head gasket) on the left side of the engine closest to the fuel tank. I removed the bolt and checked for corrosion and integrity. The bolt looked new. I talked to a diesel mechanic and he recommended I clean the bolt and coat the threads with permatex thread sealant with PTFE. I installed the bolt and torqued to specs. This didn't stop the leakage. I checked the oil and there's no sign of water in the oil. The exhaust seems normal (no white smoke from water in the cylinders). I'm not sure if I should be concerned about this. Your feedback is appreciated!
It could be a leaking head gasket a porosity in the head casting or a crack in the head at the bolt hole. I would be concerned it cold worsen and cause engine damage at some point.
It is possibly caused by coolant/water being in the bolt hole when the bolt was installed. That would create a great a amount of hydraulic pressure that cracked the bolt hole to the water jacket. I have seen this before.
If your going to try and seal an external head bolt leak, use sealant under the bolt head. Can the bolt be torqued to spec?