Cracked Head Gasket?

Hi guys. Please bare with me as Im a newbie at this and dont know much about cars anyway. I'm in NZ and I have a 92 Windom 3.0 Any that I took in for a service about 3 months ago and was told that it had a crack in the head gasket and to get rid of it or it was going to cost $3000 to fix it otherwise. The temperature gauge never seems to rise. Occasionally there is a slight oily smell after driving it but nothing major and it never seems to go through water or oil. I had an oil change done when it was serviced and it hasnt seem to have gone through any. This morning after driving it a short distance it looked like there was a small amount of steam coming out of the bonnet but again not sure whether that was because it was a bit cold this morning, the engine, the dew that was on the bonnet drying off or just the heat of the engine hitting the cold air. I'm at a loss over whether it really is the head gasket. Any ideas please? Thanks

You'll have to pinpoint where the smoke/steam is coming from. It could be a leaking head gasket or it could simply be a leaking oil filter/cooler line, connection o-ring seal, or radiator hose clamp. Open up the bonnet when you start to see the smoke and look for the source.

A head gasket leak will usually show itself one of these ways:
1) coolant leaking from the block
2) coolant and oil mixing
3) oil and/or coolant leaking into the cylinders
4) oil leaking from the block
5) significantly poorer engine performance, heavy smoke/steam from tailpipe and/or engine compartment.

Burning/smoldering oil and coolant smell different...oil is acrid while coolant is sweeter. If you've been running for 3 months with this problem and no ill effects, then I'd suspect something else. A noticeable loss of power is reason to get it taken care of quick before major damage occurs. Barring that, more likely it is a leaking valve cover gasket, oil cooler o-ring, or cam/crankshaft seal. Hope this helps!