I've done a few cylinder head swaps, and I still wouldn't condemn the head until you see the crack, or can confirm through testing that there is coolant in the oil/oil in the coolant or combustion gases in the coolant. The oil looks like it has moisture in it, but it's not the worst I've seen, usually it looks like chocolate milk.
The overheating is likely all the brown junk and rust in your coolant plugging the radiator. Mine was like this when I bought it, and I had to do several flushes before it started to resemble coolant again.