Head condition

If it was using water with a bad head gasket it's odd that one cylinder wasn't steam cleaned. Was it just seeping to the outside? Was the top of one piston very clean? Are you sure it's the head gasket?, did you find evidence?
 
I pulled that rear valve and seen the crack in the seat and I guess I quit looking. Then see what I seen the second look. Hope no the head doesn’t turn out to be junk. The other 172 I’m working on goes to my rock crusher. If I have to I can put it on my tractor. The tractor is more important. I do have a third supposedly rebuildable 172 I can get a head from if needed. I’ll see what the machine shop has to say
You indicated 100 miles each way. It would be extra work but consider taking an extra head with you in the event there is an unrepairable crack.
 
I pulled that rear valve and seen the crack in the seat and I guess I quit looking. Then see what I seen the second look. Hope no the head doesn’t turn out to be junk. The other 172 I’m working on goes to my rock crusher. If I have to I can put it on my tractor. The tractor is more important. I do have a third supposedly rebuildable 172 I can get a head from if needed. I’ll see what the machine shop has to say
I showed this to my guy I value his opinion very much. He said you can hope they can install a seat with a wider O.D. but be doubt there was room for it. Up next weld it up and cut for a another seat. He said cutters don't like this its hard to do. The next option is to spray weld it he does not have the tooling for that.

His opinion on why it did this is compression was passing under the seat eroding the head. If he were to try and repair it he would first pressure test the head for leaks. It may have already ate into the cooling passage : ( I forgot to ask about the valve caps.
 
Fill the chamber with gas, that will give you indication of how the valves are.
That looks like a cap for a valve stem. There should be caps on at least four valves. Check the parts manual to see.

Manifold off, level it up and pour gas in the chambers to cover the valves. Look at manifold ports to see which ones are letting gas pas by them.

The head is off, it is a good time to get it done up right. you should also check the block surface.

Manifold on or off, it's easier to pour liquid (gas/diesel) into the ports, and look at the valve heads in the chamber for leaks. Can also see what area of valve/seat is leaking.
 
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