Need help deciding if there is a broken head gasket or cracked cyliner video inside
 

hello, i know this isn't much of an introduction to myself but here goes,

http://www.youtube.com/watch?v=KE2RYZFO6Ng

there's my video i need help deciding if the problem is a head gasket or a cracked engine. i recently had cleaned out the coolant tub because there was black soot sitting inside of it. but the previous owner has said that its burning coolant as the engine runs, and smoke poors out of the exhaust as you can see in the video. We asked our neighborhood mechanic and he says that its probably a broken head gasket or its cracked and we will eventually need to replace it. i need your guys help. Currently its a chevy 350 5.7l engine and we found out we can buy a new one for about $700. what do you guys think? rebuild or new engine.

btw, this is my first car i just turned 16 and the laws in my state say i cant get my license till im 16 1/2 so i got time to fix this project truck up.

and yes the pic below show how rotted the rear frame is. we got a replacement though its all good.

check out the rear spring mounts they rotted completely through and were rubbing on the bottom of the bed.

I honestly couldn't tell you what that is, but someone should know. I hope you don't mind if I inquire how much you paid for that thign??

800 dollars

Ok thats a sensible amount then, if you were to swap out the motor, I would defenitely suggest swapping the tranny while your at it because its got a plow setup and you know what that means...

Are you planning on putting a box on it or a flatbed

well, it has a new tranny with about 25k miles according to the guy that switched it, so i don't think that needs to be replaced, but the engine maybe because the heads are pretty rusty and if we take those off we might aswell get a rebuild kit or something the exhaust is new, but the o2 sensor is not working so the engine light is on. there is a stepside bed in our garage now, we just took it off so we could get a better look at the frame. this thing needs alot of work but im fine with it, im just excited to see it get done.