Questions about the 3.4l motor for our resident experts

The car: 2004 Impala base model with the 3.4l, 106,700km (66,687 miles), bought new 3 years ago. I'm the original owner and I followed all the proper maintenance.
The problem: about 2 weeks ago I started hearing loud "water noises" coming from the dash area when coming out of a stop light after waiting 30 seconds or more, and during stop and go traffic. It's like the cooling system was emptying itself a bit during the waiting time, and when pressing the gas to go forward then the heater core would get filled up again.
The car doesn't overheat at all and it runs fine.
I went to the dealer today for regular maintenance and asked them to check it out. They did the diagnostic and added some Dex Cool. The noise is gone.
Great news? I'm not sure about that. They said the rear head gasket needs to be replaced because it's cracked and the engine is blowing air into the coolant. We can see whitish foam on top of the coolant in the expansion tank. The service writer said they've seen that problem a lot and they "know" it's the rear gasket.
The cost of the repair with everything they want to replace is $1137 CAD, plus the oil change, plus taxes that's about $1340 Canadian, or $1230 USD.
OK are they trying to sell me some expensive repair or was topping off the coolant the solution all along?
They said nothing about the "upper intake manifold and lower gasket issue" that we hear about, only the rear head gasket.
Expert advice and opinions are greatly appreciated.
Thanks!
SJ.
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How do we dispute their findings, cannot tell from here what is what, the intake would be done while doing this, ask them what test they did to determine this was the problem.

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StarWolf wrote:

This is a very common problem. We see a lot of these rear cylinder head gaskets leaking. It usually is an external crack in the gasket, it's nowhere near the combustion chamber and usually what happens is that you get a slow coolant leak that often evaporates before you see it dripping on the ground.
If topping up the coolant solved your "air in the heater core" problem, it still means that you were losing coolant somewhere.
If you decide to do the job, I would do both cylinder head gaskets at the same time. The labour to do the second head gasket while you are doing one is only a couple of hours more....might just as well do both. Make sure they include new head bolts in your estimate. And you will obviously get a new intake gasket at the same time.
I'd go for goodwill. It's a common problem, and our dealership has goodwilled them even after 100K. Let GM eat it! If you haven't been a regular at this dealership, your chances are slim.
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Thanks! That explains what the service writer was talking about. He also mentioned the car "could go up to 200,000km" with that leak but it would become more serious and the coolant would then start dripping on the pavement.
For now I'll just keep a jug of Dex Cool in the trunk.
SJ.
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