Strange as it may sound, I dont mind if its a head gasket. That can be fixed easily enough. What I dont want to happen is what DVSTurbo described where it was one drama after another because of the engine overheating once due to bad bleeding technique.
Is it a CO2 test that finds head gasket problems or was it compression test?
I know how a CO2 test works but I always thought a Comp test was the way to do it?
Doesnt matter either way, Ill get them to do both before they start throwing parts at the car just incase I have to bin my engine

Keep in mind if it is a head gasket and you redo the head only, it might lead to failure of the rings shortly after.  This happened to my friends car.
 
He had similar overheating issues to you.
 
Cheers 

This just gets better and better

Sounds like a blown hose from hell to me.

get a cooling system pressure test done. This will rule out any hidden leaks causing air to enter the system. (mine turned out to be a cracked block)

Hey Guys, Im after a part to stop the car from cooking itself. Its a coolant housing on the left side (if you are looking from the rear of the car) of the engine. Kind of looks like a thermostat housing and has 3 pipes 1 from the engine 1 to the radiator top pipe and one small one to the turbo. We did a pressure test and this part was corroded beyond repair. On a good note, the engine had very good figures on the compression test so its not all doom and gloom.
Any help you guys can give is much appreciated, no wrecker in sydney has this part and it will take a long time to get a new one from Japan.
Thanks

That is the part that one of the guys suggested previously, it's a very recognisable part with all the hose connections and the sensors connected to it. I'm pleased to hear it was just that part.

thanks Rob. Unfortunately that's not the end of it. Without this part the cooling system won't hold pressure so we can't do either pressure tests or CO2 tests to see the condition of the head gasket. It's a three week wait minimum for this part to come from Japan.

Rizo:  The same thing is happening to me and i absolutely agree with you.  I love my Sdub too much to give up on it.  I don't care how much money i have to throw at it, I will bring it back to it's former glory and then some :)

No Doubt, but these things are an absolute a**hole to get parts for. We should set up a database of wreckers on this site who stock mr2 parts. Cant tell you how many wreckers I have called in the last 3 days looking for this coolant outlet assembly. by the way, did you want the service manuals for your car?