sounds like head gasket is the least of the worries.
oil out of exhaust means there is oil getting past the rings which means piston and/or cylinder are hurt.
Just for a small example, I'm working on my late father's G1800. diesel. Dad called me last year and said this $#&*( lawn mower will not start. Said he ran the $#**ng thing out of fuel. Ok cool I'll run by there on lunch (about 40 minutes later). I did. I get there, he's out mowing. Ok I guess he got it going. He came in to eat with me and mom and said these f*&*##@'n things are a pain to get started if you run em out of fuel. Anyway, I started to get back to work and noticed a can of starting fluid sitting next to where he normally parks the mower. Ah-hah. That's how he got it started. Dad, being old I didn't say anything and to myself, I fully expected to have internal engine damage. Dad passed in May of 23 and mom still uses that mower. Well she mentioned that it's hard to start and smokes out of a pipe that hangs down beside the engine. I went & looked at it, sure enough, low compression and lots of oil usage (uses as much oil as it does fuel). Well she babied it through the summer and now I have it. Broken ring land on 2 cylinders' piston. Direct result of starting fluid. Stuff's real hard on these engines! So now I get to put about $800 worth of parts into it and free labor (it's really my mower, I just let mom basically have it while I keep it maintained).
so with all that said, it's possible that the PO had hit it with the starting fluid and damaged a piston or two or maybe bent a couple rods. Pull the head and find out. If rods are bent the pistons will be down in the cylinder at TDC. You can't see the rings and ring lands on the pistons until you remove them, so if the rods ain't bent, you'll have to pull the oil pan and remove the pistons. If the cylinders are scratched or scored, you'll have to pull the block from the unit and rebuild it-which depending on the damage may be as expensive as replacing it. Generally the dealer techs will weigh the cost to rebuild (parts + labor) vs the cost to replace (engine + fluids + labor). If there is not a big difference in cost, and a lot of times there isn't, then they'll suggest replacing it. Also a replacement engine is oftentimes carrying a better warranty-at one time it was 1 year/1000 hr for replacement engine (if R&R was done by a dealer). Or if they rebuilt it, it would be a 30 day or 90 day warranty.
That begs the question, why is a rebuild so expensive? Labor. I've done quite a few. Rebuilding costs are machining costs (farmed out usually), parts, fluids, gaskets, bearings, pistons/rings/pins/clips, and lots of labor. I did an L2900 engine overhaul a while back (at home) and I'll tell you that the flat rate for a block R&R is nowhere near what actual time is to rebuild one. Replacing the engine on that tractor is a 7-8 hour job where the rebuild was closer to 34 hours total labor (start to finish including removal from the tractor, etc). Plus machine shop cost (cleaning, bore/hone/etc). Just to give you an idea....if labor is $100/hr, that's $3400 worth of labor (just used as example of course). $100/hr is cheap for dealer labor rate nowadays.
side in the Texas heat these days either.