I have here some information in diagnosing a cooling system problem,as it also became my problem before.
1.Understand that overheating problems may be caused by a low coolant level, the radiator being plugged, the thermostat may be stuck, or other related common cooling system problems.
2.Check the coolant level at the radiator overflow/plastic coolant reservoir tank to see if you're low on coolant
3.Open the radiator cap and look inside the radiator when the engine is cold.
4.Fill the radiator with a 50/50 mix of antifreeze and water if it's empty or low, and close the cap.
5.Look at both the lower and upper radiator hoses located at the top and bottom of the radiator on the back side and held by hose clamps. Make sure the hoses are securely clamped to the radiator and aren't leaking.
6.Touch both the upper and lower radiator hoses when the engine is warm and the car turned off. They should both be somewhat warm. If one is cold, you may have a thermostat that's stuck closed.
7.Use the palm of your hand to feel the outside of the radiator from top to bottom when the engine is warm and the car turned off. It should be warm to the touch evenly throughout. If there's a cold section, you may have a radiator that's internally blocked.
8.Check under the car, inspect the radiator and look around the engine compartment for telltale signs of a coolant leak: Coolant is usually greenish, slippery and sweet-smelling.
9.If there is always a puddle of coolant under your car it could be due to water pump failure, or a cracked coolant reservoir.
10.Visit your mechanic if you know there's a leak but can't find it. A mechanic can detect a slow or small coolant leak by pressurizing the cooling system.

 

On that leak from the small hole under the water outlet, the water pump on the 2.7 has 2 vents to leak water out of the engine not to the engine, one is next to the thermostat housing and the other is under the water outlet between the cylinder heads ,on the inside,
The other issue on how to remove the pipe you don't have to remove the heads, just take the nuts off the engine mounts and lift the engine up to remove pipe.
the engine will go up without any damage to the engine or the tranny.
Good luck

 

I like your fix and if I knew of it before spending 20 plus hours on this, I would have tried it. If the new one fails, that's what I'll do...

 

I'd had intermittent heat last winter and assumed it was an electrical problem something to do with the blend door.

Turns out it was this exact problem, which resulted in a coolant loss and hot water not flowing into the heater core.

I replaced this water outlet housing this week. It was a giant pain to do, but it's now done. I removed the front crossmember, which turns out was the easy part. I loosened the intake manifold enough to get a gear wrench on the back bolt and it took me a while to jockey the old one out due to it hanging up somehow probably on the bend in the back of the pipe toward the rear of the engine.

When I put the new one in, it went right up against the intake manifold bracket on the back of the engine. It took some jockeying to get it around the bracket but finally did and buttoned up the whole front part of the engine, leaving connecting the water hose on the back for last.

I go to put the hose on and realize it went around the WRONG side of the bracket. Since everything else was done, there was no way I was going to take everything apart again to fix it. I got the hose back on and all seems to be good now.

What a pain, but at least it's done now!

 

Hello, and Thanx for info, I'm having this problem. Can you post or send me pics of your fix?