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Oil was wet, Autozone guys think bad headgasket 700 1990

From my limited experience, that does look like water in the oil. I had an Escort with oil that colour.

As per oil leak on exhaust side it does look it's coming from the head gasket. I have no idea of how common this is or if it could possibly be something else.

I have a weeping head gasket on intake side of my '89 745. I suspect it will go a long time before it finally needs replacing.

Having said that, I'd count on having the head gasket replaced.

EDIT: Hopefully some experts can chime in and give you more thorough advice.

--
Norm Cook; Vancouver BC; 1989 745T 208,000KM






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