Volkswagen Repair: low coolant, head gasket leak, oil filler cap

Question
Hi, I notice one day on my 96 Golf GL that the temp light was on in my car.  Now I know the car wasn't overheating so that means I am low.  So I pop the hood and noticed that the expansion tank had very little coolant in it.  Next I notice when I was about to do a oil change after removing the oil filler cap that there was alot of light brown sluge.  Spoke with some people and they believe I have a head gasket leak.  Another thing I notice that my coolant hoses were very soft indicating that oil has contaminated the hoses.  So I was wondering if this is a common problem with the 2.0 engines.  I am affraid that I have a crack in the block or in the head.  Also I believe the head is aluminium so it could be warped, but since I owned the car it never overheated so it may not be that problem.  So I was just looking for a answer hoping to make me feel more comfortable.  Because if other 2.0 engines experince the same issue then I don't mine spending the time myself replacing the head gasket.  I am just affraid if I take everything apart and then find out it's not the head gasket but something like a crack block.  I would really appreciate some advice on my issue.

Thanks,
Brian

Answer
Before you do anything check the oil cooler. This is the assembly right above your oil filter. It has two hose connections on it. This is a possible source of where the oil and coolant are mixing. Are there any other symtoms? Check spark plugs for residue. Is there always water coming out of the exaust even when the car is warm? Misfiring? Blow By? Blow by is pressure where it shouldn't. Like pressure in the cooling system even when the car is cold. Pressure in the crank case pushing oil out into the intake. Check your compression. If your head gasket is blown, the cylinder compression should be low in one or more cylinders. I am Max's German Car located at 15020 Oxnard st Van Nuys CA 91411.