Sounds like the head gasket has gone, that sounds as if water is getting into the block, & it's burning it off.
My rover 25 was identical to that. I took the head for a skim, and was told that it was badly distorted, & was advised to check the block face, and that needed a shave as well. It's a bitch of a job, but it's the kind of thing that you only want to do once. It's very rare that the block face needs a skim, but for the sake of dropping a straight edge across it, it could save hours and hours of wasted time and effort. Good luck !