Coolant in oil; head gasket looks fine?

Cusser my head bolts came off easy as well. I used a 3/8 ratchet with a 3 inch extension and a short 17mm I believe the size was.. is this bad?

I would think if they didn't have the correct torque - and initial loosening was too easy - that would be a red flag to me. When I rebuilt my '88 B2200 in Oct. 2011, all 10 head bolts were real tight still. But mine never overheated or had a head gasket issue in its 183K miles. So in your case I'd wonder if someone previous to me did not torque those correctly, and never checked head bolt torque after 500 miles.

Well the engine I did the head gasket on was a crate engine from my parts truck. So maybe it was from the factory? Don't know but I do know all is well now.