Helping a friend work on his Johnson 40hp, 2-stroke. Here is some background on the motor. It's a 1990 J40TLESR, serial # G2532019. Whats happened is it was having trouble starting, and the over heat alarm is going off. Also It's having some issues staying running. He replaced the T-stat, and replaced the entire water pump assembly. I went over today and performed a compression check. Last time it was done was about 2 years ago and it was at 130psi on both cylinders. Today it was 120psi on the top and about 98psi on the bottom. The plugs have clean oil on them and no appearant water mixed in. When the engine was running, I can hold my hand on the exhaust cover, but not on the head...it gets HOT. I took out the thermostat and smelled inside the hole, it smells like fresh oil/gas mix in the waterjacket and there is a coat of oil on the thermostat, and the old one had carbon built up on it. Is it safe to say he had a failed or failing head gasket? Or is there something else I should be looking into? Thanks in advance for any help.