The 1.25 zetec se is a very good engine, and they go well for what they are, I recently did a lambda on one of these as it was only doing around 140 miles to a tank!!
Driven gently all the time she(owner) now gets 300 plus, even though the lambda value was ok on the emissions, but CO way over, everyone telling me it was the cat, I was not convinced, the lambda had been dodgy for a few years and had a dodgy mot last time before being sold at auction, by dealer tha mot'd it!!
I can see why he did not change the lambda, it very nearly entailed the removal of the exhaust manifold, but copious heat from a gas torch had it free eventually, wtf do people do things up so tight, these only need a slight nip, used a universal lambda at about £25, works perfect.
If the head is skimmed , and put back right it will be ok, most likely been run low on water, they don't have any particular weakness in the cooling system.
tabetha