It's also possible you water pump is leaking, or you have a pinhole somewhere in the radiator (I hope not!!) or the hoses that only leaks when the system is hot. I'd do a real close inspection of the motor for water leaks before coming to any conclusions.
If you are getting water into the combustion chamber, it could be one of several things, all of which are NOT good. I'm not 100% up on exactly where the coolant circulates on a 4.0, but in general, the following places are usually suspect:
1. Head Gasket
2. Intake Manifold Gasket
3. Warped Head
4. Cracked Block
Some motors circulate water through the intake manifold, and some don't. I don't have my book with me to check on the 4.0. Maybe someone else here who has ripped a 4.0 apart has that info.
BTW, I just helped a friend fix the same problem on his Escort GT, and he had a blown head gasket, a cracked head, and a bad water pump!! We think the water pump went first, overheated the motor, warped and cracked the head, and blew the gasket. Cost about $450 in parts for a rebuilt head, gasket set, timing belt and water pump.