Do you know what test(s) were performed by your shop to test the headgasket?
I had a simular problem w/ my 735iL, and it ended up being the headgasket. My pops and I Knock it out in no time and saved mucho danero.
Mine would overheat and coolant would discharge from the overflow tube. Because the headgasket was shot it was alowing exhaust gasses to flow into the cooling system, thus causing air bubbles in the cooling system. Pretty much causing a vapor lock in the cooling system, not alowing the coolant to circulate.