Q: blown head gasket?

To answer your last question first, manufacturers of motor vehicles, that would include all of the army of engineers, scientists, and other high trained trained specialists, almost as a rule do not recommend the use of aftermarket "quick fixes", in your case a head gasket sealant, to repair an engine. All these fixes represent are the effort of "marketers" who are highly trained in "advertising" and they have proven their ability to quickly separate the public from their money. Don’t fall for it. If you’re curious, and you want to do a test of your own (I’ve done the test a million times), call the "800 number" of one of these places that vends their version of "snake oil" and ask them for a copy of the complete independent laboratory (preferable academic-affiliated) authored report (it should be voluminous) that shows actual results from field tests of the "snake oil". The line will go dead because they usually have nothing, nothing credible or complete for sure. I could go on and on, and I should (to protect YOU) but let me answer the rest of your question. Nothing you have stated conclusively points to a head gasket failure and, complicating things, is the possibility that you could have a combination of faults. The no heat, for instance, could be a heater control valve failure, blend door malfunction or plugged heater core. you have already mentioned rust and contaminants in the cooling system. You did not indicate if the no heat issue was resolved with the heater core flush. You did not indicate overheating or coolant loss, two possibilities with a head gasket failure. Also, if you do have coolant in the oil, such can occur on some engines through leaks elsewhere. What I would recommend is that you request a cooling system diagnostic, such as a leak diagnostic during which a certified Mechanic can evaluate for you the symptoms that the cooling system is displaying and let you know if any problems found are due to a head gasket failure or perhaps are due to other causes.