I don't think it was water. I was thinking more along the lines that gas was going in the top of the carb (where it probably shouldn't be going) and burning off from the engine heat. The steam/smoke was coming from inside the carb and I couldn't see or hear anything until I removed the air filter. My temp gauge isn't working, but it didn't seem like the engine was overly hot. I'll put the temp gauge and thermostat at the top of my list though and look for a shroud.

In my Haynes diagram it looks like the enrichment jet is on that side of the carb. Maybe it's leaking down into the top of the carb without going down the intake after I shut it off??