Howdy all,
Out of necessity I allowed my wife to use my Volvo 240GL while her car was being repaired. She reported that it seemed to be getting hot on very short trips, and I found that the coolant level was very low, the reservoir tank was coated with a dark greyish brown sludge, and the coolant was leaking out from the front of the water pump where it connects to the pulley. I successfully flushed the system and replaced the water pump with a new one, which fixed the leak. Upon a celebratory drive however, she wasn't sounding right and overheated again. Upon checking the oil level, while the level was ok the color of the oil had changed to a lighter shade, headed towards grey. When I looked into the valve cover through the oil filler cap, it appeared like someone had put some oil into my milk... :( I'm not familiar with this situation, but some mates from work say the head gasket is badly leaking or the head may be cracked.

My question is, am I likely to get away with using a stop leak product (Chemi-Weld), and flushing/refilling the oil and coolant... or do I need to proceed directly to having the head gasket replaced (I do not think I can accomplish that on my own). If the head is cracked, does this mean I'd need a new engine? The car is a 1984 240GL RH drive sold in Australia, with just over 250 thousand kms on it. I got it fairly cheap and have had a few troubles with it but nothing really bad (as in, potentially expensive) until this, so I'm hoping this won't end up being the last straw.

Thanks for any advice you can offer.