browsing the web looking for stuff on the K series ( may have a little project going ;) )
came across this - Lotus's solution to the 1.8 head gasket problem
Fixing the Problems
As a 1.8 litre there are, or were, two minor problems, design features of the basic engine which did give rise to problems when the engine was tuned. The first is the positioning of the thermostat in the cooling system, which was not designed for engines frequently put under heavy load. It was first designed as an efficient engine for lightweight front wheel drive cars, typically the Rover Metro and the current Rover 25, with good fuel consumption and requiring low emissions from start-up when the car was likely to see a large number of very short inner city journeys. It was thus designed to give very rapid warm up by placing the thermostat at the coolant inlet to the engine, where the thermostat measures essentially cooled water from the radiator with a very small quantity of heated water from the balancing circuit until the stat opens. This is a very unusual coolant path design, but is effective in its required purpose.
The system does not function well in cooling circuits with a radiator a long way from the engine in the cooling path, or for engines constantly seeing high engine speeds .The problem arises when the engine is put under heavy load, causing high engine temperatures that are not immediately read by the thermostat because cold water in the radiator and hoses has to pass the thermostat first. This can cause enormous thermal gradients across the engine, causing both distortion of the head and block and also gasket failure. The vehicle which suffered most from this was the Land Rover Freelander. Apparently, the typical owner for this vehicle is the middle class housewife and mother who use it for large numbers of short shopping trips to the supermarket!! Being heavy and 4x4, the 1.8 litre K"s tend to be pushed very hard from cold. This results in the engine getting very hot before the water can circulate and open the thermostat. Result " blown gasket. Early last year, Rover introduced a new thermostat, the PRT thermostat that will open with pressure as well as temperature, the result is that it opens much more quickly and prevents this thermal shock across the engine. There still appear to be problems with the Freelander, amid concerns that Ford have already executed a cost down on this new thermostat. However, it is quite apparent that as soon as the thermostat is moved to the output on the engine that temperature related gasket failure no longer becomes an issue. It is something of a surprise therefore that the Ford engineers concerned with the installation and performance of the K in the Freelander do not adopt this simple approach. The PRT thermostat is also a very expensive item that must be an issue with such pressure for cost downs. However effective the PRT thermostat is for a road car, a far more effective solution for any engine used on the track, and in fact any Elise with its problematic long coolant hose runs is to move the thermostat to the output side of the engine. Both Elise Parts.com and QED do inexpensive remote thermostat housings for this purpose. When one of these units is employed, the thermostat is measuring the engine temperature and is therefore able to control the coolant temperature quickly and sensitively.
Removing the thermostat altogether, as currently practiced by some, is no solution, firstly because engine warm-up becomes protracted, with all the implications for premature engine wear and secondly, because the engine temperature is at the mercy of the pump speed, if engine speed falls, the coolant in the radiator will cool disproportionately, then as soon as engine speed builds and engine temperature with it, the pump speeds to sends a mass of very cold water from the radiator suddenly to the engine. There is no thermostat to even this process out so the engine is repeatedly subjected to thermal shock. Bad for the head, bad for the block, and sooner or later the gasket will go. Fit the thermostat to the coolant output and the extreme temperature gradients that beset the engine when used on the track are significantly mitigated. Modification of this coolant path is something that Lotus should have done with all the K series engines in all their Elise"s, This would have then prevented any gasket failures.