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Do compression-test, identifies blown headgasket pretty easily.
When headgasket goes, intake-stroke creates vacuum in cylinders and that sucks in coolant. Especially when warmed up as there's maximum vacuum in cylinders and maximum pressure in coolant-passages. Coolant then gets forced past rings by compression-pressure and bingo! it's in your coil!
Another possibility is bent con-rods from hydrolocking cylinders.
For this engine, I'd disassemble, clean up and measure everything. Then replace just what's needed: headgasket, rod/main bearings if worn, valve-stem seals, maybe valve-job if seats are worn past limits. Wouldn't hurt to do some porting & polishing of intake while it's out.
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