You have to be pretty careful about washing those engines, they are very prone to having Engine Electrical Problems after washing them, especially if water gets where it shouldn't.
If you want to wash the engine don't spray any water on the top, just use a spray on cleaner and wip off. As far as washing the side, you could use any type of degreaser and just hose it off.
If it is the head gasket, it will be coming from the front timing cover gasket. The place to look would be on the passengers side of the engine, in front of the exhaust manifold, where the head and front timing cover meet. That's where it usually leaks from, and leaks down the side of the block and makes a mess.