head gasket or cracked radiator?? need help diagnosing!

[Shadetree]

I'm helping my son work on his best friend's Impreza, which has a blown head gasket according to a local shop.
It's the double overhead cam engine, automatic tranny.
However, the oil is clean, the insides of the valve covers and the cams look pristine. No evidence of milky oil anywhere. The plugs look good, no fouling at all. When the upper radiator hose was pulled, the coolant looks clean as well. The radiator cap is clean as well, but my son said he did see a "little" mud when he pulled the radiator cap. There is none that I can see in the radiator or the overflow.
Nothing I can see looks like a head gasket issue to me.
Now, here's the weird issue: the radiator was almost dry. I had read that a cracked radiator would let ATF into the coolant. Didn't see any evidence of that, but we pulled the transmission filler/level inspection plug and fluid POURED out. Should it do that?
We pulled the transmission drain plug (briefly) and only clean ATF came out. We only let it run for an instant, though. The Fluid from the fill port was not milky either.
We really don't want to pull the heads for a radiator issue. Any ideas how to narrow down the problem?

 

[SimpleMan42793]

Rubber glove works good to determine if it's a head gasket. Make sure fluids are full, remove radiator cap, attach a rubber glove over the radiator opening using a rubber band to seal it to the radiator and start the car. As it gets up to temp, the glove will expand like a balloon if it's a bad gasket.

 

[mjm4jc]

Blown head gaskets on Subaru's hardly ever show up as coolant in oil. Good suggestion above by SimpleMan. You can also do a compression leak down test if you have a test kit. If not, Autozone rents them free. The trans fill plug when removed will "gently" spill out fluid when properly filled. If it poured out like when removing the engine oil plug, good chance that it was overfilled. After the car fully warms up, you can go to the tailpipe and take notice of the smell. Sometimes, you will be able to actually smell coolant when the head gasket blows. You can also have someone follow you when you drive. After the car is fully warm, if you step on the throttle to accelerate pretty hard, you will see white smoke blowing out the exhaust. Most Subaru head gasket issues that I've seen are usually evidenced with engine oil leaking at the head. When this is the case, most times, the car can be driven for another 100K with no issues. I know this sounds bizarre, but it's true. However, if your head gasket issue is evidenced with white smoke blowing out the exhaust, then they will need to be replaced. Your compression at this point is low in at least one cylinder. Hope this helps.