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There are oil, water, and air (ie, oil return) passages between the block and the head. Depending on where exactly the gasket blows, you can get oil in the water, water in the oil, loss of compression, and all or some of the above. But no matter which you see, it's still a blown head gasket and the fix is the same.
And yes, if you see any of these, it needs fixing 'cause it isn't gonna heal on its own. If you see water in the oil or no oil, DO NOT EVEN START THE ENGINE, lest you do a LOT more expensive damage. As expensive as it is to replace the head gasket, it gets MUCH worse if you also have to replace the main and/or rod bearings, too.
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