Mine was like that when I bought it (I didn't know until I changed the thermostat). I ended up replacing the head. I did run mine for quite a while before I saved up for the new head. I JB'd a stud in the lower hole, then ditched the thermostat gasket and used blue permatex in its place. I didn't do much more than hand tighten the nut on the bottom stud and let the whole thing sit a couple days before I filled it up with coolant. It was still working and sealed pretty good when I got around to changing it. I ended up ordering from Cylinder Heads International and got the head delivered to my door for 325 and that included return shipping on my old head. They don't care if it's busted or not, so long as all the parts are there. I called them up and ordered and had the head the next day. I do live close to them, so I got it faster than most people will. Still, they were good to deal with and I wouldn't hesitate to use them again.
Here's how mine was broken: