KLE head gasket

The oil in my KLE has gone milky.....

I checked the oil level the other day (about a week ago) and the sight glass looked a bit strange, sort of cloudy. Today I took the oil filler cap off and it was all milky underneath.

I assume its the head gasket, but it hasn't overheated since I've had it, although I did replace the radiator cap about a month ago because every so often it spat out a bit of water, mainly from the resevoir bottle.

Big question, what am I looking at for a head gasket replacement. I bought the bike s/hand from a liar ( I can't call him a thief).....