A little update. The car has been sitting at the mechanics for about 2 months now while i decide it's future. I kinda spent way to much money on my holiday to New Zealand, so my grand plans have had to be downsized.
We took the head off as it was using a small amount of water, and i figured it deserved a new headgasket if i was going to strap a turbo to it. At first glance everything looked good with no corrosion, and no sign of a headgasket failure. Once i rolled it over the problem became more obvious. Take a look for yourself.

Also this engine is a Astron 2 but look at the water port on the side?

Good news is that it has flat tops and the bore is still like new
So this is what i am thinking now. To keep costs down i am going to steal the head, injection and turbo setup off my widebody and put it in Grandpa. I know it will not make huge power being only tbi and with a tdo512a, but it means the auto will stay together, and should still offer a significant power increase over the stock carby setup. This way my car is back on the road and should be fairly reliable. Also with this way i can go mpi on the widey at my own pace as more funds become available.