Hello Samuel, The standard cap that should be on your M should be a 4Ib cap. Having said that I have a 7Ib cap on my M and seems fine. As for the water loss this requires a little explanation. If you have just a radiator only and it is filled to the brim, when the engine gets hot the water will expand and be passed out via the cap overflow this is normal. The cooling system has about 41/2 gallons in it and to loose a point of water due to expansion is about right. When the engine cools down that lost water is then replaced with air back via the cap. The next time you run the engine up to temperature air will be expelled and no water. This was how the original cooling system worked. Today we have a more modern approach to our cooling systems that include expansion tanks and catch tanks. The catch tank, collects the lost water via the cap overflow and stores it. This is then siphoned back into the radiator when it cools down via the cap so the radiator always remains full. Hope this is some help to you. If there is anything that you are not sure about please ask, we are here to help.
Kind regards Charles Gough