I have a 02 focus and there is rusty water seeping out spark plug holes. Is this a bad head gasket?
Thanks

 

Very possible.

Do you get a white smoke puff when you get on the gas?

 

Check for white smoke, oil in water, and water in oil. remove all plugs and do a compression test aswell as coolant pressure test. If the plugs are in tight nothing should get past them when making a good seal. you sure its not coming from something over head and leaking down?