300TE head gasket?

I've got a 1988 300TE 12 valve auto (UK model) and whenever the revs go over

4,000 (yes, I know - I drive it on Sport mode everywhere) I get a puff of smoke.

Also, oil's being used up and there's a creamy deposit in the coolant reservoir.

Could the head gasket be gone? If so, is it serious? What sort of cost is involved?

Thanks

David