98 Rodeo: Blown head gasket , I think > Worth fixing?

I'm helping a neighbor who overheated his 98 Rodeo (3.2L V6, I believe). 198,000 miles, well maintained. He had a hole in the radiator and the temp gauge was pegged. He limped down the shoulder of the freeway to a
gas station. The engine was making clicking/popping sound, he said, along with lots of steam from under the hood, obviously.
He had it towed to a shop closer to home. They didn't even open the hood and told him his engine was cooked, and for $3500 they could put in a rebuilt one.
He knows very little about cars, so he gets in and drives home from the shop(!!!)....even on the freeway. The car runs fine all the way home.
Tonight I got some tools and went to the vehicle. Besides the big hole in the top of the radiator, it looks normal. Oil looks OK.
The car has been sitting outside for a couple of weeks, but I was able to start it with took LOTS of cranking. It was running real rough and blew a bunch of water vapor out of the tailpipe. I thought, yep, engine toast. BUT, after shutting the engine down for a bit, I restarted it and it's running ABSOLUTELY PERFECTLY.
...BUT, after a few minutes of idling, the exhaust started slowly getting steamier, and steamier, till it was clearly blowing vapor. Head gasket, correct?
If engine has good compression and the oil is not milky, should he get the head gaskets done and keep driving it? I plan to swap the radiator, run a compression test,inspect the plugs, and swap the oil/coolant, followed by a cooling system pressure test.
Do these cars tend to crack heads, or just blow the gasket? How much would a shop charge to pull + service the heads and swap gaskets?
I'm tempted to do the job, as I've done lots of head gaskets, but the wife may change the house locks if I did, and the bench in the garage is not a good place to sleep.
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I've got a 2002 with a V6. Head gasket blew under warranty. I suspect it's gone again. Tell tale sign is radiator coolent in oil.

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To answer your question, the answer as to what's wrong could be one of three things: one or both of the heads could be cracked, one or both of the head gaskets are blown, or the block (cyliner liner) may be cracked, or all three of these may exist. You could start by pulling the heads and looking for the obvious damage to the head gasket, but if you stopped there and put it all back together, you have more gambling in you than I do. I'd have the heads checked and with that many miles on it, I'd have them essentially rebuilt, AFTER checking the cylinder liners as well as possible. Often, the cylinder that is leaking will have tell-tale remains of antifreeze or marks of water in it, so you'll know where to focus your attention. Since there isn't water in the oil, or oil in the water, chances are that the block is ok. Once you have the heads rebuilt, though, you still have another potential problem - engines that get that hot often burn oil, since the rings get hot and no longer will seal properly. To do the job right, you may want to think about dropping the pan and pulling the pistons, which is a LOT of work, but doable. Or, you could simply put it back together and expect it to burn oil, and if it doesn't, then it's great. You can buy a LOT of oil for what it costs to pull the entire engine and swap it out. I just had a local shop here price out doing essentially the same job to my 98 Trooper w/ a 3.5, and the labor alone was around $900. I could do it for a lot less in my garage, but like you, I'd be sleeping in the carport after I started. Maybe you should do it, only in your neighbor's garage... and find some excuse to spend a lot of time over there. Hope this helps. Steve
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