Warter in oil

Block sealer won't do much if it's the common leak as that is normally the intake manifold gaskets that fail on the 4.3. The plastic cracks due to the way the gasket is made and the direction of the clamping forces hold it. Most of the sealers do a good job at plugging the radiator and heater core as well and if they get into the oil they will destroy the bearings and the engine very rapidly.
Far better repair is to replace the intake gaskets with the newer ones available. Then flush the oiling system by changing the oil/filter a couple times. If it was caught in time the engine should be OK but the coolant used likes the material the bearings are made from and it doesn't lube very well so it's possible that the engine is already damaged. No real way to tell until it's repaired.