Thanks for all the help. Talked to a friend who works on a lot of cars. Says the head gasket is gone and the head might be warped. Its going to take a while, but I'm dropping a new engine. I love my contour too much to let it go. The engine had almost 90000 miles on it anyway and its an ex rental car (I hate to think of what kind of abuse it saw before I got it). Another contour saved from the scrap yard.
