'71 250C head gasket?

Yet another problem. While checking my charging system with the engine running (see previous post), the engine overheated. The dash guage was well into the white region, and steam was coming from the overflow (I was inside for reading my tech manual!). Now, there is white smoke and considerable water droplets coming from the exhaust, as well as it taking quite an effort to get her started. There is also considerable loss of coolant after driving. I haven't pressure tested yet, but am assuming a leaking head gasket or, hopefully not, a cracked head. I want to do the work myself, but am unsure of just what beyond the gasket I should inspect/replace while I'm in there. She's more of a project car (unfortunately) at this point so I have endless time to devote to repair, so with at least 200,000 miles (odometer is dead), should I take this opportunity to do a complete rebuild? Or, as a friend suggested, simply replace the engine with one from a 280?
Thanks for your input,
Jason

PS - As far as the cause of the overheating, is this normal behavior for an idling car? With the radiator cap off, I only see appreciable water movement when I rev the engine - is the pump faulty or is this "normal"? Also, the auxiliary fan has almost never engaged - where would I begin to check its operation?

[This message has been edited by wjbell (edited 10-23-2000).]