So I might not be out of the woods yet. Would appreciate yer thoughts on this.
The Rad is in (and yep even though it's manual it has an oil cooler at the bottom.. odd but anyway). The mechanic said there was pressure building in the header tank after filling, and he reckons the head gasket is on the way out. I thought this at the start too but as I said before I tend to jump to the worst case scenario. I'm hoping he's wrong but I'm gonna have to find this out for once and for all.
So when I took it out the garage and was driving home the heaters were blowing cold. Drove for a while and watched the temperature using torque, it went as high as about 114c and started dropping back, at which point the heating kicked in. To me that's the thermostat opened up and dumped a bunch of coolant through. Crept up again briefly before again dropping back to normal (about 88c), again presume that was the thermostat opening a second time. It stayed normal after this.
Got home, let it cool off and checked the header tank, had dropped a bit so topped off with maybe a half litre. I have a feeling maybe it was just filled up and not "burped", hence the pressure he was seeing, plus explains the change in temp/drop in fluid when the thermostat opened.
I ran it again there and can't see any bubbles in the header (filled to the top), so that's good. Oil looks clean. Exhaust is definitely smoking a bit white though, and the bigger issue - there's a lot of fog/coolant smoke coming from the front, down by the driver's side of the engine, so there is coolant hitting something hot. If you did have HG issues you'd hardly see it externally would you? That leak would be internal and get passed out the exhaust I assume?