M42 with blown headgasket

[T Stewart <tstewart@xxxxxxxxx>]

HI BMW lovers:

I just bought a very clean '91 318i with only 75k miles and thus
wanted join the BMW list.

Now that I've had the car for 2 weeks, I have a real reason to ask for
your collective help: the car has a blown head gasket!

Symptoms:
    -using water at a high rate & not leaking it out.
    -Compression check readings: 1)150 psi 2)150 psi 3)175 psi
4)170psi
    -Moist smelling exhaust on a fully warmed & run engine
    -Lack of midrange power
    -#1&2 pistons are very clean showing shiny aluminum

My Questions:
    -Are the M42 engines prone to head gasket failures?
    -Is a blown head gasket an indication of a warped head?
    -Has BMW identified this as a problem?  Is there an upgraded
gasket
     to remedy the problem?

All inputs will be welcome!

                Thanks,
                                Terry Stewart
                                '91 318i

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