That's what I originally thought. The car('87 TurboCoupe) had been sitting for 6 years under a tree because it died, It was detonating under part/light throttle when it died.
I bought it last summer from my friend and one of the first things I did was pull the head to check the gasket because of his description of it's death, the gasket was fine. While it was apart I replaced the valve seals, threw in a roller cam and thoroughly cleaned every part that was off the car. I added an adjustable fuel pressure regulator and pressure gauge on the rail. All the above parts I added were already sitting around.
After getting it back together it still wouldn't start. I discovered that it wasn't building enough fuel pressure, so I ordered a new high flow pump. When I dropped the tank and pulled the pump bracket I found out that the rubber hose that connected the pump to the bracket was cracked. I replaced the pump and hose, re-aasembled and it fired right up! I never had to pull the head in the first place!
While I was warming up I checked the water level and there was oil in the water, I checked the oil and it had water too. This Friday I pulled the head again and this was the resulting mess. The gasket was fine though, I think the water cooled oil cooler might have gone bad, I have a spare or two. If the weather holds out this Friday then I will reassemble it and see what happens.
In the meantime, it has also received new plugs, cap, rotor, plug wires, radiator cap, water pump, timing belt, timing belt tensioner, battery, carpet, remote start/alarm, the trans was rebuilt not long before the engine died plus it came with a spare. I have a complete stereo sitting on a shelf waiting to go in it, at the same time it'll get a full sound deadening treatment. I have a much larger intercooler waiting for it as well as a slightly larger turbo.
The idea is to have a cheap, easy to repair, comfortable car that gets fairly good MPG's and looks alright.