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Yesterday was a very blue Monday indeed. Got a quote for headgasket removal, assessment and probable repairs for $2,500 plus. No compression test was done by the workshop though.

The diagnosis was based on oil in the radiator which seems 99% sure of head gasket failure according to the mechanic. However, would a pressure test confirm the extent of the damage?

Would it a better to remove and replace engine? What about a completely refurbished engine? Might it save big $$ to buy a refurbished engine? Any recommendations for any good MX5 workshops then?

Thanks for the help.

Are there any other symptoms other than oil in the radiator? For example, did the engine overheat, is there water in the oil, is the engine running rough etc? Is the car automatic or manual? An auto can have a problem with the tansmission oil cooler which could transfer transmission fluid into the radiator - however, this can also cause problems for the transmission if there is water in the trans fluid.
Without knowing a little more, it's hard to say if it is definitely the headgasket, although a good mechanic should easily identify if that is the problem. A tee-kay test and pressure test should find out relatively conclusively if it is the head gasket.
You are right to be asking about a replacement engine. Our enquiries with Dodsons Japanese Autospares (importers of Japanese engines) indicate that a good second hand engine should be under $1,000. They can be contacted on 09 441 3152.

Thank you for your excellent advice Andrew. You saved me thousands!