Is this a blown head gasket or what else could it be?

[The engineer]

"I was running it every couple of weeks for half an hour or so"


This would account for the water in the rocker cover and oil, rusty valve gear etc. It is probably condensation from not getting truly hot on these runs.

The water pump seal if faulty will leak water into the oil and contaminate it with water also.

 

[William_H]

Dye penetrant crack inspection

is a very sensitive crack detection method however it does take skill and care.
Firstly however use your eyes perhaps with a magnifying glass to go over all likely areas looking for cracks.
The dye penetrant method requires the surface to be as clean and smooth as possible. However be wary of sanding or grinding as this can peen metal over into the crack so disguising the crack.

A red dye is sprayed onto the surface. Some times the item is dipped in dye. It is allowed to rest for a while for the dye to soak into the crack. The dye is wiped or washed off. The developer is a powder which is then sprayed on to the surface. It has an affinity with the dye and will draw the dye out of the crack producing a red indication much wider than the crack itself. It does take skill and practice to get the right amount of cleaning initially then of the dye. It may help you find a crack however. Obviously a rough surface will hold dye and so give eroneous indications. good luck olewill