1996 Other Ford Models Could this be a head gasket problem?

My girlfriends Ford Fiesta has a thick sludge when you remove the dipstick. It is a kind of light brown colour a bit like milk chocolate. There are also small water droplets on the dipstick when it is removed. The engine has also been cutting out and she has not been able to restart it immediately. I am not sure if there is any smoke from the exhaust as I am either in the car with her or we are in mine! Temp gauge seems to be ok. Not sure about coolant levels as not really checked it but it seemed to be at the lower limit the last time I looked but she has not topped it up since. The car recently went in for a service and the guys at the garage didn't pick anything up but she spoke to them yesterday and they said it sounds like the head gasket has gone. Thought they would have noticed that on the service as they did a plugs and oil change. Any help or ideas greatly appreaciated. Thanks.