Lionel,
Generally speaking the head gasket fails as a result of heat. That should have been the first thing that was looked at. (Thermostat, water pump, radiator etc.
As a matter of practice for a head gasket change your mechanic should have checked the deck of the engine block as well as check the bottom of the cylinder head(s) for warpage. If it is found to be out of spec (generally several thousandth of an inch) he should replace which ever is out of spec or have the cyl head or the block milled.
So I would have asked if your mechanic had any automtive machine work done.
If your mechanic did not do this - go to a reputable one.
As a matter of practice I do not take on this kind of work unless the customer is fully willing to accept this.
Many good mechanics have lost their reputation on account of this kind of work because of the short cut.
The damages associated with water in the oil are usually due to lack of proper lubrication and can vary from continual overheating to premature engine bearing or camshaft failure.
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Sunday, June 7th, 2009 AT 2:56 PM