Get a magnet and check. You'll find the block is cast iron.

As your mechanic did, I too would have opted to salvage the head deck surface the first time. The other option would have been to remove the block and remachine (skim, shave, dust) the surface. This is costly. Unfortunately, this maybe your only option now.

Is the head gasket leaking in the same place? The best you could hope for is that the epoxy has held and the leak is there for another reason, such as a blown head gasket, and that it may be fixable without removing the block.

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95 E320 Cabriolet, 169K