Coolant check:
You can use the hose going into the overflow bottle as a dipstick.
Wrap colored electrical tape around it at the right spot about 300 mm below the top as a guide.
With it you can precisely monitor coolant loss if any.
Such a PITA to look at that mark on the side.

Woohoo I found the issue with milky oil cap. I decided to open up and clean out my vented catch can, and I found it was full of sludge AND 1/4 water!! 
Thinking about it, was probably my stupid fault when I was washing all the coolant off the engine, but no harm done. So I cleaned it all up, and did an oil change at the same time. But as luck would have it, the end snapped off my dipstick (due to my custom exhaust manifold, I have a commodore dipstick and tube). So I had to drop the lower Gen3 sump and luckily found it. After resealing it and taking for a short drive, I don't see anymore milky oil cap, so that should be one issue resolved and the one that really made me think I had a blown head gasket.
 
Now it is just the pressure build up in the cooling system, where I have replaced the radiator cap with a new OEM (0.9 rather than 1.1) and checked the overflow level before a drive and after cool down, where it stayed at 300mm using the pipe and piece of tape as dipstick. Next I will be taking it for a 1-2 hour drive to test it out some more, and try drive it everyday, but only top it up every couple of days. I also started to think it could be my radiator cap not releasing the pressure properly, leaving the system pressurised after a few days. But I wouldn’t think a cap would fail to release pressure, but rather fail to hold it.
 
I haven't actually checked my cooling system pressure, but was going to make something like this to check it out.
https://www.youtube.com/watch?v=oqqv4iscYWU
I also haven't checked my ARP head studs torque. I haven’t taken the rocker cover off since I bought it a few years ago, and haven’t had issues thus far, so wouldn’t expect them to be loose. What are the different thoughts on checking these?
 

Well I finally took the MR2 on a club run. It was a 400km round trip for me to Newcastle, and the car went great, and I thought everything was fixed. No overheating, temps were very stable even though it was a really hot day (and I have no aircon). I think I recall it averaging high 70s mid 80s, with a peak of 91. It was mostly highway klms though, with 2 hours in traffic at the end.

Once I returned and had parked it, I came back an hour later to find a small puddle of coolant under the car, which I worked out came from the overflow. I then drove home later that night carefully, with no issues. The next morning, I opened the radiator cap and found this, which looks like oil in my cooling system. I definitely have no coolant in my oil, as I had the sump off a couple weeks prior.
 


So now I am back to thinking I either have a blown head gasket or a cracked block, weeks before MTC. At this stage I am thinking of doing the following:
1. Compression test
2. Retighten ARP head studs
3. Another long drive
4. Compression test
5. Look for oil in radiator cap filler neck again. But without flushing the whole cooling system how can I distinguish between new and old?

I've been doing a little research on retightening ARP head studs and found this:

http://www.toymods.org.au...studs-how-to-re-torque

Has anybody else tried this? What process did they follow? I'm a little concerned about completely removing each stud nut, and also whether I wlll be able to get to the stud at the end of the intake camshaft (without removing camshaft) they refer to. Looks like the torques should be 65ftlbs.

Besides making my cooling system less efficient what will a little oil in my coolant system do at the track? I have also read this would eventually mean I will get coolant in my oil, at which point I will need to stop driving as coolant obviously doesn't lubricate bearing too well.

What other options do I have besides removing the engine, getting the block magnafluxed, replacing head gasket, and putting engine back together at this stage?

Mrskylighter
I would definitely try re-Torquing the app headstuds. They may not have been checked after the engine was originally assembled with them.

I would just keep driving the car for every trip you need to make so the problem eventually becomes obvious.

I agree. Don't panic yet.
Keep driving it and continue to check the look of the oil and the coolant.
You may find that the puddle underneath the car could just be from too much coolant in the overflow bottle.
I did this once in my Commodore (filled the bottle too much) and when my wife drove it the parked, it overflowed onto the ground. She wasn't able to contact me, so she called the NRMA and they towed it home! There was nothing wrong with it.
Let us know how you go.
 
FYI I used to have a lot of cooling system issues and they went away after I bought the oversized Mishimoto radiator.
https://www.mishimoto.com/mishimoto-toyota-mr2-90-x-line-radiator.html
Seeing how you have no thermostat, you may want to block the engine bypass pipes to ensure that you have maximum coolant flow through the engine. I can show you exactly what I have done on my car at MR2WPC.
All of mine are blocked/disconnected except for the pipes that go to/from the turbo.
 
For others reading this that have a thermostat - this is not recommended unless you drill 6 x 2mm holes in the thermostat, otherwise you will find that the thermostat will not open early enough due to no hot coolant flowing to the back of the thermostat to tell it to open.

I noticed that the diagrams had broken links. Sorry.
This one should help. I found it with Google though edited it.
I have an external oil cooler so have blocked the stock one. I have shown which ones are blocked in the diagram using a red circle. The one that isn't blocked is green.
Basically - the only one that passes coolant is the line from the coolant outlet near the distributor to the turbo, and then to the back of the water pump.

 

I wouldn't pull the studs out. I would just re-torque them in the same order as stated in the factory manual. Apologies if you said it earlier in the thread, though do you have the standard bolts, or ARP studs and nuts?
I would worry about causing undue stress on the metal of the head by removing bolts/studs one by one whilst the others are still fully torqued, and as you said, it may affect the seal of the head gasket and cause more problems.

That picture isn't too clear but you are certain that's oil? I would of expected it to emulsify if the oil and water was mixing.
 

Mrskylighter
You probably already know this but just in case. Make sure you loosen off each nut before you retorque it up again (instead of just tightening them as they are now). I think arp recommend torquing them up in three stages also (one pass at xx, then slightly tighter and then final go at xx)

Wait what? surely you can't be suggesting the OP actually loosens all the nuts and re-torques from scratch?  The OP has done over 400kms on that headgasket to merely undo the nuts and re-torque would IMO be a terrible idea given the situation who knows what lies between the sealing faces of the gasket and it could only get worse if you loosen it, not to mention the gasket has already been compressed (unless its a re-usable MLS gasket).
 
Not sure what ARP recommends for their torque sequence but if the final setting is a plain torque wrench setting with no additional angle for example 85N.m I would just check each of the studs at that setting, if it's an angle as well say 45N.m plus 90 degrees and you are going to loosen it I would be taking the head off personally.