yeah id say its just condensation if its running real well
looks like melted ice cream huh? lol

thats an old continental engine
theyre pretty tough even for their age (old troopers)
they hold up well

parts should be available since there was a lot of these engines produced
you may have to go to an engine rebuilder to get them if the clark dealer cant help

if the head gasket was blown itd show signs of it under load most likely
is see continental compression ratings between 125 and 145 in my cheat sheets
id take compression and look for anything weird and make sure all cylinders pop off within 10% of each other

if it was burning antifreeze you would smell it when you stood behind the machine when it was running
and most likely see white smoke from the tailpipe