I am not one of the expert mechanics, but I noticed your post has been up a while, so I thought I would try to help. My experience is 22 years of working on a Suburban that I assume has the same 5.7L engine you do.
It is very hard for me to tell where the leak comes from. My first concern is that you keep talking about water leaking instead of coolant. I assume you mean coolant--water mixed properly with anti-freeze.
Generally my experience is that it is the water pump and your location sounds like it.
It could also be a hose. I have had them crack, or leak at the fittings. Most recently had a heater hose crack near the fitting. Cutting off the end and putting it back on solved--it was long enough.
Somehow you have to get where you can track the coolant leaking down. Might need to clean the engine.
Sorry. I know this was not a lot of help.
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Friday, March 2nd, 2007 AT 8:41 PM