'89 Engine Knock! Need advice!

[BrianSupra89]

One of the kids I mentor has a 1989 Supra N/A with auto trans. I helped him find it and believed he got a good deal. Had 109K on it at time of purchase and now has 119K. Here are the issues that I know of at this time...
- Small oil leak near top front of motor. Lots of fresh oil under car now. Uses a quart every few hundred miles.
- A solid knocking has started in the past few weeks.
- Oil pressure builds but I'm not completely sure what is normal for this car. At idle, the gauge sits at or close to zero, but gradually raises up to around 40psi when put under driving load.
- Coolant seems to be a bit filmy and has some brown particles floating in the overflow tank which means there could be a head gasket leak from the oil side to the water side. (Had this happen to my 85 Celica once. Outcome wasn't pretty)

The car is still running like a champ, but I've told him to drive as little as possible until we can properly diagnose the problem. Any suggestions would be greatly appreciated.