Passat (B5) :: 2000 - Loosing Coolant Through Reservoir Overflow

I have a 2000 passat tdi, over the past months ive noticed that I have been loosing coolant through my coolant reservoir overflow, my car has been running perfectly, my mechanic told me that its likely to be a head gasket problem and he put ceramic sealer in the coolant system, which was a disaster, the coolant pressure became much worse and told he me I needed a new radiator, which he fitted, but there was no improvement, whilst my mechanic was working on the car he noticed that when my car was running if he removed the oil filler cap the engine breathed heavily, my mechanic told me that the engine would need replacing,so I should sell the car as soon as possible.

I found it difficult to believe my trusty VW was in such a bad state, as it has only done 87000s mile and has full service history and starts and runs like a dream. Today I went for a second opinion, they told me that the coolant problem was because of a defected water pump, with most likely the plastic impellers failing, and the engine breathing problem could be down to a blocked breather at the top of the engine.