ok, i have seen similar symptoms on a mini i once owned...

prsurised water system (actually kept blowing hoses...) and gradually using a little water - no evidence out of exhaust...

eventually it hyrauliced in a majour way...

that was a cracked head that opened up as it got hot, but head gaskets can fail, and it just depends where they fail what you see...you will only see water in the oil if they fail accross a water and oil way...the betting is its just failed btween the pistons and touched a cooling chanel...

think your into pullingthe head and having a good HARD look at the head for cracks and replacing the gasket, probably get the head skimmed while its off - ewhile your there might as well chuck in a valve job - lets face it all this stuff is cheap on parts and long on labour and most of the labour is in stripping the head off and putting it back on...