Yep 100% agree. I would be lining up a new head without question.
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If the gasket had broken else where I would have water in the oil.
Its not cost effective to replace the gasket Ive had quotes from
$6k-$10K , Cheaper to replace the motor as Mudski said
I've done it before on a surf, at home and for under $2k new head and all bits and pieces. Then I was told that my overheating was due to a crack in the block. Got a reconditioned bottom end for $3k and it still overheated, then I sold it.
Sorry mate, but I really don't know what else to say.
This is why I didn't want another diesel, especially one that is prone let go.
I'm happy with my gas blower, cheap to run and strong as nails.
Sent from my XT1033