If the over flow had bubbles and oil..then yes it is the headgaskets gone bad. Also another give away is a cloud of white smoke behind the car (but when my SC blew the HGs it never happened so its hit and miss I guess).
As for the harmonic balancer...first check to see if it has a bolt holding it on. Mine had no bolt and I used my hand to remove it...it was crazy! Basically the tension on the belt was the only thing that saved my arse. Your balancer my still be good but without a bolt holding it in place, everytime it moves it causes the sensor to lose its signal...in which killing the motor. Also sometimes the shift up light won't appear. I know that I replaced the sensor (this was before I realized my bolt was missing) and well the car ran for a while but it was very rough due to the signal being out of whack.
Now to the part you're fearing...costs of such a job.
Headgaskets...if done by your self $400-800 if you replace your belts, hoses, wires, plugs etc. you'll be on the higher side of the total. If done by a shop you'll find prices ranging from $1000-$1300 usually 500-800 bucks being only labor...so might want to see if you can get your buddy to do it as a favor with your assistance.
As for your balancer...just did mine, and instead of a crap stock unit I went with a BHJ...little more pricey but worth it in my eyes. Also added ASP underdrive pulleys while there... Total damages was some where's around $550...however I did the work myself and God only knows what they may charge you in a shop.
I hope you have good luck and things don't turn out like your saying.
On both jobs I got my stuff from
www.supercoupeperformance.com Bill E. will take care of you! Also most of the stuff you can get from any parts store, but its always nice to give back to one of your own when you can in my eyes. Plus Bill is always there when you need assistance and actully knows something unlike most parts store guys.
-Tim