Hi guys! Just thought I'd update you guys on what happened to my car. I finally managed to find time to pull the head and everything, and found out that the head gasket is okay.
It turned out two cylinder walls were scraped up by the piston. They weren't even adjacent walls (#2 and #4). I haven't done a full autopsy to determine what would destroy two cylinder walls -- but this is the end of the road for this 968 powered-944: