You do have a legit concern about any damage from the water in the oil. But, you can minimize that by parking the car now and not using it until you can get the head and gasket replaced. Edit to add: If you can, also drain the oil prior to parking it, change the filter, and fill it with clean oil. Don't run it after that, until the new head is on. This oil is just to protect the innards from the water in the old oil. You will change it again before you start it up after the head work.

Changing a cylinder head on these engines is pretty easy. I've done it twice, once three and a half years ago for a blown head gasket, and a second time (just finished yesterday) because a mechanic screwed it up back in July. Just to put you at ease, the second gasket change was not needed as a matter of course, but because I procrastinated about changing the heater control valve, which then split and blew out the coolant, overheating the engine and warping the head. Shop I took it to screwed it up, so I just redid it my self. If you want something done right . . .

Anyway, the first time you tackle head work in these engines you might feel overwhemed, but believe me, it is far easier than you think/fear. Since it is fresh in my mind now, let me know if you are going to do it, and I'll write up some details that are not in the FAQ, and which might help you a little. Biggest advice: study what you are going to have to do, think about it and visualize over and over again, then tackle it with patience and persistance. Buy top quality parts (Elring or Victor Reinz, if not Genuine Volvo), and work very clean and carefully. The most difficult part on the turbo engines is access to some of the nuts: the ones that hold the turbo to the exh. manifold, and several others on that side are very slow to get on and off. Probably so even if you have stubby or stubby/ratcheting combination wrenches (I don't). Patience and persistance are the keys.

Should take a first-timer about two to three days of comfortable, not-rushed, work. The biggest hang-up will probably be the machine shop, they can be miserably slow at times, and you don't want to rush them.
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Scott Cook - 1991 745T, 1985 RX-7 GSL-SE, 1986 Toyota Tercel (Don't laugh, it is reliable, faithful AND gets 41 mpg!)