I had that same engine in a different car and I had the same problem.  Although there are a few details you might be leaving out, it sounds like a blown head gasket.  Did you let the car overheat?  That's what happened to me.  A mechanic here (El Paso) was going to charge a little over $800 to repair it, but if you have the time or are mechanically inclined you can buy the gasket kit for less that $150 and do it yourself.  It seems a lot harder than you'd think by looking at the engine.  Just take a picture of everything you take off and how it was originally and you'll be fine as far as putting it back together.  You'll need a torque wrench ($20) and a repair manual for your car ($10 from an auto parts store) to tighten everything back up properly.