Volvo Repair: 1996 Volvo 850 R Loss of Power, volvo 850 r, head gasket

Question
I recently bought a 1996 Volvo 850 R.  The car idles smoothly, by the sound of the turbo it seems to turn smoothly and the car drives smoothly when driven by lightly pressing the gas.  But when I press the gas hard the car seems to have severe loss of power, and it just doesn't have any power.  I noticed the muffler has a pin size hole in it and when I press the gas hard while in idle that a mist of water sprays from the hole.  I think it may be a head gasket?  Any thoughts?

Thanks...
Dean

Answer
Hey Dean...

          If you had headgasket problem...you'd be adding to rad...also engine wouldnt run well....I think.
           You may have blocked cat...or turbo lag....check wastegate operation....the water from the muff is probably condensation...all exhaust systems have it....really not a sign of failed headgasket.

          Bilbo