Based on my recent head gasket experience, I can tell you the following.
The M103 and M104 series engines are plagued with the head gasket issue. They manifest themselves in slightly different ways however. Typically, the "oil in coolant tank" issueis an M103 symptom, but I suppose it can occur on the M104.
Leaking at the rear of the head occurs on both, although mine breached at the front.
Oil leaking is profuse when it lets go. Performance is unaffected, but how much oil leakage you can tolerate is your call.
As far as discovering coolant leakage issues? Here's my theory. The combustion pressures are far higher than coolant pressures, and when the head gasket lets go, the combustion pressures now increase coolant pressures. This probably shows up as "running hot" when the car is idling at a stop or something...I witnessed this with mine.
Extended high pressures with the cooling system will cause the weakest link in the system to fail...in my case, the large heater hose near the rear of the engine. It started out as a tiny leak, and I was filling the coolant tank every month or so. Eventually, the leak got larger and I was filling it up every other day. Finally, it ruptured, and by sheer luck I was able to limp it home with no adverse effects.
Your assessment of a head gasket leak is pretty accurate, IMHO. I got mine done by my indie a few months ago, and based on what's involved, I understand the cost of labor...
