I found the source of the water getting into the crankcase. The breather line that goes from the crankcase to the air cleaner. The linme needs to be higher.

Second did anyone make a snorkel for these little bikes yet? If you can you post a picture and/or some info.

 

You can probubly plug and make the line higher to the air box yourself. Even make your own snorkel out of PVC pipe and a lightweight marine check valve.