Gizmo said..
Pull out the dipstick, what color is the oil..... translucent and honey color, or like a cappuccino? Or what is the color like underneath the oil filler cap?
This would be ideal to help diagnose.. as Pweedas says it might be just a thermostat or similar.
If you really believe they're shonky:
I would be going back 1st thing monday morning to dealer, ie opening time. Take your own mechanic if possible. If you can't find or afford one, take a large mate to pretend, have then only grunt, not answer questions, and watch carefully, ie lean over bonnet not from corner of the room. If their mechanic tries to ask him questions, have him say "mate pretend I"m not here, I'm simply observing as a witness for any future legal action".
This is because their mechanic will have a close relationship with them, a lot of trade-ins will need work for RWC and in a closed-loop buddy buddy system they will do each other favours where they are confident of not being caught. But they won't cut corners with a silent witness observing.
Plus you can be taking photos all over, plus going thru log book & taking photos of log book, etc, anything to show them that you're serious.
Between now and then I would research 'statutory warranty' for WA, consumer law, etc. (I guess you're trying that here). Try to have some understanding.
Google 'no win no pay' lawyers, see if you can download & print a scary piece of paper, like a legal letter of demand template on a law firm letterhead. Put that on a clipboard, make notes on it as you go over the car.
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Having said all that, a blown head gasket doesn't make a car a lemon. In a car that age, I would actually prefer a properly repaired blown head gasket to a ticking time bomb.
I would be changing all rubber parts of the water system, as water dropping out while driving is the main cause of it happening. I have, however, owned 2 cars that blew head gaskets due to metal parts of the water system corroding from the inside out - fairly impossible to see that coming.