I have a 96 Contour 2.0 DOHC 4 speed with overdrive just blew head gasket or possible cracked head. I have water in all cylinders. I was looking at options. I heard cooling is a common problem for these cars. Could I change to a 3L or am I better off fixing this one?

Fix it. It's a massive undertaking to swap from a four-cylinder to a six-cylinder, you're essentially going to have to swap entire front ends...wiring, subframes, mounts, transmissions, etc. Zetecs are common as dandelions, when you consider how many different Fords used that engine.

I'm sure you could change to one but you will be doing something that is uncommon and will have to start the project knowing that a lot of us don't know what you will go through. Before someone tells you you need to change the trans or not, check the bellhousing pattern by taking a picture of the back of a 3.0 and the bellhousing of a 2.0 ATX. Then see if they look like they'll bolt up or not. Otherwise you'll be needing an ATX from the contour V6 platform and then pairing it up with the 3.0L.
That may give you a chance to go through the ATX and put in the new clutch packs as well as an upgraded valve body like has been done before, then put together the new powertrain and install it. Also you will need the wiring harness and PCM that go with the 3L engine while you are at it so that it makes it a direct drop in. The wiring harness plugs directly onto the pcm with the pcm bolting up under the glove box so you shouldn't have too much trouble just swapping it out. There may be some issues where the engine harness hooks to the body harness though....you'll have to check the schematics out on that one.

Definently fix it. Throw on a turbo while your at it! Simple as that.