I am thinking a head gasket? Any other possibilities??

I think that you're correct. However, if the engine has been seriously overheated, it could also be a cracked cylinder too. In the past, I've bored and sleeved a few of those too, mostly caused from overheating. Hope that isn't the problem.

If you have a sloppy timming chain it might have worn through the cover into the water pump passage. common to happen. when those plastc guides break thats what happends. do a compression test. If its fine its probablty that cover.