Actually, that's what we just got done replacing along with the exhaust elbow in hopes that's what it was. Exhaust ports had specs of rust in them and it was badly corroded. Now I'm thinking that it's the head.
But.. after consideration, I think that I'm going to go ahead and just repower. It's either spend $600 replacing just the head and still have a 15 year old lower end that's been beat to hell and has a slight rod knock from the water in the oil or spend $1800 on a brand new/ no core charge long block that I know is good.
http://www.flagshipengine.com/catalogpages/23/page23.htm
Curious about a "Vortec" 3.0L though..? I've heard good things about the company..