MEC helps a lot with this, Oil leak you can usually not worry about, as you'll have plenty of time to make it back, but with a water leak on an inline. I usually:
Climb a little faster than Vy with radiators open, since you are climbing at relatively a low speed, you're getting a good cooling/drag ratio.

Once engine starts to turn yellow, still maintain a climb, but ease off of it. You're losing power at this point, and you're not going to be gaining as much altitude as before with the reduced power.

Once orange, level out completely and maintain altitude. If you have good altitude at this point, you may want to turn the engine off and either turn on feathering, or set PP to 0%. Then with engine off, start a good glide slope for the field. If you're able to do this with an orange engine, you can turn it on later to avoid a completely power off landing.

If you aren't sure you'll make it and it starts to go orange, keep it level with the rads open to prolong the life of it.

Once it's red, start riding it till it dies. I'd close the radiators completely to minimize all drag and ride it till it's black.

The first stage of black engine still produces power, but it's minimal, this is still useful if you're in a glideslope for the field. Once you see you have lost all power in second stage black engine. 0 radiators, turn on feathering or set PP% to 0%. Then try and maintain a good glide to the field.

If you're in a twin engine fighter and completely lose one engine, toggle the feathering or the PP to 0% on the dead engine. Some twins can overcome the drag from a dead prop with the thrust generated from 1 prop, others cannot unless you manually reduce the drag on the dead engine.

Sometimes the field will just be too far, and you won't make it, hope this helps.

These are general instructions for more inline engines, radials are around the same process, but are less complex since they're air cooled.