I would still get a second opinion from someone else.
Phone around and see if there is anyone who can do the work cheaper. Or even ask/beg someone on the boards to check it for you. The checklist I gave (I think) covers most head gasket trouble indicators, and a compression test gauge is cheap, and nice to have. The test is as quick as changing your sparkplugs.
Unless of course when it overheated the last time, you really drove it a good distance with no coolant. In which case all I can think of to say is ... Shame!
Best of luck, thanks for keeping us updated