You're on the right track. You could have a blown head gasket or blocked coolant passages. I would remove the head and inspect it carefully. Verify that the coolant passages line up with the corresponding passage on the block. If they do, inspect the gasket carefully and look for breaks. If you don't find any breaks in the gasket, lay it on the block and see if any of the passages are being blocked by the gasket. You could be looking at a very inexpensive fix.
