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There is a space around the cylinders I have never seen before and its filled with a combanation of oil and a very thin fluid what belongs in that passage.
Yep, Honda uses wet sleeves. You're used to closed deck iron blocks that Jeep uses. The space around the sleeves is filled with coolant under normal operating conditions, and the head gasket prevents the coolant from mixing with oil (not it's only job, but you probably know that).
There should be a large bolt on the front of the block, if memory serves correctly. You can remove that bolt to drain everything out of the block. Ideally, you would completely strip the block down and have it hydrosonically cleaned, but I'm guessing you don't want to do all of that. Remove that plug, rinse the sleeves out with some purified water, and you should be alright. Don't let water get into the cylinders, though, and if it does, use a rag to get it out.
Thanks guys! I am just cleaning the head and pistons and surface area for the new gasket.
These motors are very different then what I am used to for sure.
Nice to be apart of a forum and community that gives such good and quick feedback and advice.
all the motors with the Y. y7,y8 etc. I guess have the drain on the back. Im draining the oil aswell in case any fluid got into the oil passages.
I used a paint pen to mark the t belt and sprocket/gear and left it at TDC. Should be fine.
How many miles on belt and water pump? You may be money ahead to replace those while your that close anyway. Just a suggestion, and we are here to help!