BMW Repair: Cylinder head cracked?, head gasket, bmw 325i

Question
Ive owned my 1988 bmw 325i for about 6 months now. Until last week it ran perfectly until one day coming home from work it started overheating. The temperature raised extremely quickly so I parked it ASAP. I went back to it a few hours later and it ran fine but again it overheated quickly. i took the thermostat out and tried to run it again but it ran terribly (shuddering) for a few seconds and died, and it wouldnt start again. i came to find out that all of the coolant and water was in the oil pan there is now oil/coolant mixture in everything (radiator, fuel intake, exhaust, cylinder head). what could have gone wrong? i could do all the labor to fix the car myself but is it even worth saving?

Answer
Bryan,
 There is a gasket that is pressed between the cylinder head and the block called the head-gasket.  This is like the "weak link" of the system.  If pressure builds to high, it will crack and blow out the side.  Likely what happened, as the coolant heated, it expanded and eventually steamed.  Steam is very powerful, and it probably cracked this gasket and allowed the coolant to go into the cylinder, instead of circulating between the head and block.
 I would remove the head, look at the head-gasket, and see if you can find the area it's leaking from.  Since you have the head off, I would take the head to a machine shop and have them check it for flatness.  If it's warped, they will mill it back flat again.  

 More to the point, you need to find out why the car was overheating.  It sounds like a water pump issue to me...

 So I would take off the head, and at least replace the headgasket.

 Good luck,
 Josh