Pug 106 possible head gasket blown??

My peugeot 106 diesel has been playing up, recently the heaters were only blowing cold air and it was found that I was leaking water,which when topped up again with antifreeze/water resulted in hot air being blown again out of the heaters.
This happened again quite quickly after this and I have taken to a mechanic who has advised that my head gasket is on it's way out but should be ok until after xmas (keep replacing the leaking fluid so as to get warm air rom heaters)
I filled up the levels last night fully and this morning when driving to work I noticed that there was steam coming from the right hand side bonnet of the car as though it was overheating, no warning lights came on though.
Also when driving I noticed that the reek from the exhaust was a lot heavier and a slight loss of power whilst driving. Are these symptoms that the head gasket needs replaced ? My father says not but mechanic says so.I would like another opinion.
If not what could posibly be the fault

Couple of things to check re: a blown head gasket.

When you take the top of your coolant header tank, does it smell of exhaust fumes? (Careful when you do this, so not to get scalded by hot coolant)

Take the Oil filler cap off, is there a creamy gunge like yellow/orange mayonnaise present? If so this is an indication that water is emulsifying in the engine oil, another indication of a blown head gasket.

cheers

CJ

Sound about right, one way to check for sure, without any special tools is simply whilst the engine is running, but coldish, check the header tank, if the water is really boubling (not boiling though) that will indicate h/gasket. Also, have a look at the dipstick/oil fillercap, see if they have any whiteish grey deposits on them.

thanks a lot for your replies, will check for these tonight.