Ford Fiesta problem ...

Hi all
On Friday, my R reg Fiesta Ghia suddenly started to run rough and lack in power. It had just been raining very hard, and I assumed some wet had got
in the electrics. It didn't get any better though, and by the time I got home, the engine was struggling to run, and the exhaust was quite smoky. It smelt like petrol smoke rather than oil smoke, and the exhaust continued to wisp for some minutes after stopping the engine.
I had a look at the engine, but it was quite dry as far as I could see. I restarted it, but there were no sparks flying, or anything obvious, so I went in and rang my local tame garage to see if they could spare 10 minutes to have a quick look if I could limp it up there.
When I went back out to it, it struggled a little to start, but when it did, it seemed quite sweet. It drove fine for the first half mile, then got rough again. When the mechanic got his head under the bonnet, he very quickly arrived at a diagnosis of head gasket, even though he said it was very rare on these, and he had never had to change one. He seemed to be basing this diagnosis, in no small part, on the low water level in the expansion tank, although he did spot a small leak at one of the hose junctions on the right side of the engine.
I'm not convinced. Over the years, I've had a few motors with failed head gaskets, but never with the symptoms described. The mechanic was muttering about ' cooking ' but I can categorically guarantee that the engine has not been cooked now, or in the past, and has never shown anything other than correct temperature.
About the only other thing I can add, is that a couple of months back, it had been suffering a very slight hesitation at low revs, or sometimes just at pull away. They corrected that by replacing the plugs and leads.
I left it with them expecting that more definitive tests would be done to prove the diagnosis, but when I went back Saturday morning to get something out that I'd left in it, The engine was already in bits, and they were struggling to get the head off, it appearing to be stuck at one end, which the mechanic said was a further indication of a blown head gasket.
Any thoughts from anyone ? Sorry it's a bit long.
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