Technical Newbie looking for help... 1.6l blown head gasket?

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Technical Newbie looking for help... 1.6l blown head gasket?

esirtype?

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Hello all! I'm new to the forum here. I'm for the US and in Brazil for a few months visiting my girlfriend and her family. I found this forum searching google. I was looking for information on her 98 Palio, Weekend 1.6l. It just came from the garage, again. The mechanic isn't a good one, as I suggested to her family last time they took it to the shop.
Long story short, I suspect the head gasket is blown, or possibly the head is cracked. I don't know how prone these engine are to this. Form my experience from my 87 Mitsu Starion 2.6l, these engine had the same problem and same symptoms as this Palio.

The history of the car, that I know.
It's a 1998 1.6l
It has about 150,000 kilometers on it
The car since new has been in Brasilia (the capital of Brazil) where the weather isn't crazy hot
Last year when I was here it was taken to the machine due to running poorly. The car smelt really rich and ran bad and loved to drink the fuel. It also was dieing and lacking power (rich rich rich). Here her family doesn't have any tools, so digging into it wasn't an option. I suspected it was a bad coolant temp sensor, fpr and/or possibly the O2. The mechanic had the car for a short time and calmed he rebuilt the engine (that was my understanding). He didn't though. There were no signs of this then. He did replace the FPR. I noticed when we opened the hood the vacuum line to the FPR was hard and cracked and barely stayed on the nipple for the FPR. He claimed it didn't matter, I insisted it did. He also did a brake job on the car and clutch.
We picked the car up and it was worse than before. It had no power and there was a ton of air in the line. He insisted this was normal also. We took it back to the garage and the mechanic used the scanner. He was getting a code the the o2 sensor. She he kept the car longer. He didn't replace he o2 sensor but claimed it was the fuel rail that was bad.
So he replaced that and from what I remember it ran the same. I saw no reason for the fuel rail to be bad. It wasn't leaking fuel. Maybe the mesh screen was clogged, which is no reason to replace a part that doesn't wear out. At this point they drove it as is.
A year later and I'm here again along with more problems for the Palio. It starts pretty hard now and runs rough for the first 20 seconds or so. I'm sure it could use some good fuel injector cleaner. The main problem is, it looses power, drink a lot of water and loves to heat up while sitting (normal) and while drive at more than 40km.
I'm suspecting the head gasket is blown or the head is cracked or warped. The mechanic today said it's normal for this 1.6l engine to heat up to the red zone and he couldn't find anything wrong. He did say it was an electrical problem. I doubt that. The fan is kicking in when the needle is about 3/4 of the way, I believe. I know the fan is functioning for sure.
I haven't had a chance to take a look at it, but I will. I don't believe there's any coolant/water in the oil. I will see if there are bubbles in the coolant while it's running. I know it's not leaking coolant on the ground, so I suspect it's dumping it into the engine and burning in the combustion chamber. The heating problem could partly be due to a bad t-stat.

Any ideas? Are the 1.6L engine know for this? Any help would be smashing!!! I've been searching through the threads and really haven't found anything to concrete regarding the problems.

Thanks all!!!

Tchau,
Shawn
 
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