... I now seem to have a blown head gasket, had oil blowing out the dipstick tube all over the engine and I can see water spraying about under the rocker cover via the oil filler cap. So I know its an engine out job to change the gasket...
First that last comment is wrong, as Peter has pointed out. You can certainly do a head gasket replacement without taking the engine out. You simply lower the gearbox end as you do to change the water pump, to give you access to take the upper timing cover off to get at the camshaft gear bolts and remove the timng chain, but first you must back off the timing chain tensioner! Many forget to do this and that can then mean the engine has to come out.
However, two things worry me about your description. You say water or more correctly I hope, coolant which conrtains anti-freeze, is spraying about under the cam cover! Even if a head gasket has blown that is an unusual thing to happen as there is no easy path from a blown head gasket to the cam and rocker cover area. The first thing that you need to do therefore is remove the cam cover, remove most of oil from the top so you can see the four small core plugs under the cam in case one of those has sprung a leak. That is about the only way I can think of that coolant would be spraying in that area. If that has happened maybe the head gasket is in fact not blown.
The next thing would be to do a cylinder compression test, to verify if you do have a head gasket problem.
but maybe the rings are damaged as well with the blow back issue
Very unlikely Tony. For the oil coming from the dipstick, that could simply be crankcase pressure caused by a blocked vacuum port to the inlet manifold. That is not uncommon as it can get carboned up. If the port is blocked the green P.C.V. is going to get lots of oil mist through it as the pressure from the crankcase would blow via the cam cover hose and the suction from the top of the carb. assuming the set up is as per the originally designed system.
... so so not a cheap or quick fix if at all.
Possibly not but that depends on just what has happened. If it is a core plug and not the head gasket, it could be relatively quick and easy.
just to add the breather filter was cleaned out and not blocked...
It's not a case of the filter being blocked, as that rarely happens, it's whether the vacuum port is blocked. It the vacuum from the inlet manifold cannot draw the fumes from the crankcase, then the crankcase will pressurise and you will get oil blowing out of any other possible orifice and that usually means the dipstick tube and the mechanical fuel pump for starters.
I am not sure how or when i will proceed yet.
As I said, remove the cam cover first, which is relatively easy, to see if there is a lot of coolant in that area along with the oil which should be there. Remove the oil or oil and coolant, in the wells using either a small oil syringe or soak it up will cloth, and check those core plugs.
From what I can see £4k is what car joy are quoting for an exchange engine I'm not sure if that is around the amount required to do it over here and is the car worth spending £4k on.
At this stage an engine exchange is possibly way over the top, and in any case why go to Europe when I have engines here?
I might do some investigation on the trailing arms to see if they will play ball to make life easier (as that is just my time) if i go ahead with the engine removal!
If you have a problem with a trailing arm or arms, then that sould be a major consideration first as these are not cheap!
Also just to add the car never overheated when this happened and managed to drive home around 5miles without any misfiring or real loss of power, I only knew it happened because i did not have the engine cover on and could see the oil hitting the glass hatch !
Which is another reason that the first suspect should NOT be the head gasket. You need to find out what has happened before you can make any informed choice of how to proceed.
Roy