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 

Sounds like a blown hose from hell to me.

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

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.

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?

I was looking for parts for when my car was defected a while back, most of the wreckers wanted ridiculous money for everything. Probably only 2 out of the 10+ I called had any MR2 parts in SA. They know MR2s are getting rarer, and take advantage of it.  
 
I ended up finding the parts from other members and borrowed some locally too.

a gen3 is much better in every way.
THEN replace every hose, sensor, pipe and electric :P