Toyota Repair: 90 toyota 4x4 p/u, toyota 4x4, head gasket

Question
I just got this p/u from a relative, he was going to give it to a salvage yard... he told me that the timing gears needed to be changed, well I changed the oil and started it up to hear what it actually sounded like.  It doesnt sound like the chain is slapping, it could be loose.  I then checked the oil, it is a milky color, which tells me its getting water somewhere.  Im curious if I have a bad head gasket, or if this could be the result of the timing issue... can the motor pass water through the timing cover into the motor?  I dont know anything about toyota motors...or am I in the right area thinking I have a head problem?

Answer
If the timing chain is worn it can rub through into the water jacket in the front engine cover but this doesn't rule out a possible headgasket problem either.
Remove the timing cover first and inspect the chain,tensioner and guides and look for any worn through areas on the inside of the cover.