brown stuff in your radiator almost always means a blown head gasket, unless the guy put water into the oil fill, thinking it was for the radiator...
a couple of other things you can check are:
1) pull one of the valve cover gaskets, preferably the one for the head for the side that you saw the water come from. if you see the same brown stuff, then you have a bad head gasket.
2) do a compression test on the motor. if one of them is much lower than the others, than that cylinder is most likely leaking into your water passage.