Quick update: I called hoffman machine and let me say, I'm glad I did. They clearly have plenty of experience with these cars, and they were super helpful. Len? gave lots of info and plenty of background on the crack rates among the various 996/986 heads.
There seems to be a lot to it, but it looks like my head is likely cracked in a location that is not repairable, and not visible from the outside. I never had any mixing of fluids, and the coolant was pumping out of the exhaust. These are two symptoms that that it was a crack between the coolant jacket and the secondary air injection hole. To verify this, I would need to remove the exhaust manifold and pressurize the coolant system and look for weeping from the hole that feeds the secondary air injection system across the head. Unfortunately, I didn't do exactly that. I had pressurized the system, then pulled the manifold, but didn't re-pressurize after to verify that the leak was coming from that hole. This seems to be a rare failure mode that only affects a few motors... I would recommend talking to hoffman if you find yourself in my shoes!
End result, I have to buy a new head. I'll give you guys another update once I've got a new head in-hand!
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