Is this normal?

To start, letting your car idle to warm up doesn't do it any favours. The water is just a bit of condensation, no worries. Ticking is not 'normal' per say, but not terribly uncommon. What weight oil are you running? How many bars are you showing at idle?

Personally, I'll start my cars, let them idle for 45-60 seconds while I get myself in order then drive gently until up to operating temp. My general rule of thumb is to keep the car below 2500 RPM until proper temps are reached.

Jonathan

Im not sure what oil is in it. The first thing I did was had the car towed in to a local german car specialist. He had to replace the fuel pump and relay to get the car running. He also did some other work including an oil change. The pressure hovers between the 1 and 2 at idle. It does bump like it misses a cylinder about 1 ever 5 -10 seconds at idle. the pressure drops when this happens. The diesel I had also ticked like this, but I thought all diesels did that. sounds like a sowing machine.

have you done any "free-spirited" driving lately? what i mean is have you driven about 65-80 mph for longer than ten minutes? if not, try it out and you will probably get rid of whatever water is in your muffler. its usually good to stretch the legs of your vehicle every now and again. plus its lots of fun.

I havent taken the car any further than 4 or 5 miles at time so far. The car was sitting for about 2 or 3 years so I'm a little nervous of getting her on the open road just yet. I dont think I would be comfortable with the current tires doing 80. I do get on it trying to blow it out and it seems to be clearing it up a little, as well as the shits and giggles factor.

soft ticking is common and shouldn't cause you any worry. if it's harsh, loud, and rattling, though, then that's your timing chain and you should get thee to a mechanic.

the misses you're talking about sound like what i had on my 560SEL a year or so ago. turned out it was a bad spark plug wire.

the smoke out the back is fine, provided it looks like water vapor and doesn't smell like burned motor oil...

lastly, i agree with the above posters -- take your baby for a spin on the highway. don't worry about breaking down -- the worst that can happen is you'll coast to the side of the road and call for a tow truck. not the end of the world. and if your car really is in so bad shape that it can't handle the highway, you might as well find out now, before you pour a lot of (unnecessary?) money into it for cosmetics and stuff. but i predict all will be just fine []

Is the ticking coming from the valve cover area? After reading this and other of your threads it would not be a bad idea to have the valve covers pulled to check the condition of the chain, chain guides, and valve train.