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I would not condemn the head gasket yet. I had a bad head gasket on my 16v and it was leaking oil into the water, which is more likely as the oil pressure is typically higher than the water preassure. If the oil is brown , it could be just old and wet from condensation. So first change the oil and filter. See what happens. Take a look in the water overflow tank. If it is dirty, change the water too.
Make sure your mechanic has some idea what he is getting into if he pulls the head. Before thehead can be removed the cams and cam carrier have to come off, only then can the head bolts be removed. Make sure the mechanic has a manual for this engine, and READS IT before he starts the job!
As I warm up, get the manual and change the timing belt and balance shaft belt. As mentioned, if you don't know the last time they were changed, you are on the road to engine detruction. The belts last only 50000 miles, then BOOM!
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744 & 745 GLE's (IPD a-sbars)16v M46, 245 SE(IPD a-sbars) auto, 242Ti M46(IPD springs and bars), 745GL 8v auto
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