Headgasket??/

Alloy heads should be skimmed before fitting a new gasket or the track eroded by the previous leak (often near invisible to the untrained eye) will be a weakness and will cause it to blow again in a few 1000 miles.

Are you sure it has never overheated? Are you sure it has coolant in the rad? I got a 200SX turbo with a knocking engine real cheap. "It's got water in it, the header tank is full" said the previous owner. "It will sit at the same temp on the gauge all day, just below the mid point, never overheats" he said. The expansion tank was full of nice clean water. Took rad cap off and put 1 litre of water into the orange mud.... The temp gauge was reading the air/steam temp which is just little bit lower than the normal running temp for a pressurised system. If the tube between the rad header tank and expansion tank gets air locked then the system will not pull water back into the rad. So the expansion tank stays full, coolant level drops and the engine is going to suffer.

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Yes headgaskets can fail just from age without being overheated. But if there is water in the oil make SURE it is a head gasket (cylinder leakage test will show it). I've seen chains wear through covers etc and cause water in the oil that other people assumed was a blown head gasket.