Got her all painted. Driving to Fresno. Funny noise --
not so much banging, though -- large amount of blue/gray
smoke bellowing from rear of car. Pulled off of
freeway and shut her down immediately.

Oil dipstick shows water...(oil is gray colored) and
overfilled.

Blue/gray smoke bellowed from oil cap when opened.

How do I trouble shoot? I need trouble shooting engine
problems for Dummies.

Head gasket?

I'd be wondering if that is really water. Try draining the oil and look at it some more. If the water is whipped into the oil (as expected by the running engine), the appearance should be roughly that of a milkshake (though the color can vary). But after cooling, you should get a layer of water on the bottom.

Sounds more like fuel to me, perhaps a ruptured pump diaphragm.

I think that Randall may be correct. A head gasket generally always leads to white smoke and that sweet burning smell.

Sure sounds like water/antifreeze in the oil; if it is then thats generaly the head gasket blowing out allowing the coolant to enter the cylinders or crossing over into an oil gallery.
Sometimes head gasket leaks will push large amounts of air into the cooling system that will show up as large bubbles in the radiator.
Hope you got it home safely!
So once you get it home check the compression on the cylinders with all plugs out and block the throttle and air valves open.
If you get 2 adjacent cylinders with low readings you've found the culprit.
Taking the head off is generally not that difficult unless you get a stud hanging up.

You can usually smell the gas if it has somehow mixed with the oil.