Exhaust Gases in Coolant

[one_happy_canuck]

The cooling system in my 2003 X5 3.0i is getting pressurized by exhaust gases (verified by a block test, which turns a dye yellow) so I guess i have a head gasket leak, a cracked cylinder head or a cracked block. (already replaced the thermostat and water pump and the system holds pressure with no leaks).

I'm wondering if there is any way to narrow the problem down between the gasket/head/block without doing a teardown? I don't have the typical signs of a head gasket (oil in the coolant, water in the oil or white smoke on startup) - just an ongoing problem with air in the cooling system and over-pressurization.

I'm wondering if I should just assume its a cracked head or is it more likely to be a gasket or the block? The engine was mildly overheated when a hose popped of but afterwards runs absolutely fine except for the cooling system problem - it doesn't use coolant or oil and doesn't appear to contaiminate the oil with coolant.

Advice appreciated..

Also my local shop claims that the engine has to come out for a head gasket replacement, but can anyone confirm??