7M-GE issues

[AFnic]

hello everyone, as you will gather from what im asking i am new to the toyota/supra world. recently purchesed a 86' supra with the 7M-GE for $100 but it broken. here is the back story in a nut shell: goofing off in parking lot, between 5 and redline for about 5 minutes, car starts to over-heat so we stop and turn the car off. start it back up and whoa new sound from the motor. check the dip stick and the oil is a good color, but is slightly low, and there is gray smoke coming from the exhaust, and the exhaust manifold. say fuck it and start to go home. pull up to the entersection and start to go and the car stalls and wont start. think maybe the water pump siezed. pull it in the parking lot and there is nothing wrong with it. throw in some new coolant and try to turn over the car. nothing. play with distrubuter cables. nothing. play with ignithion cable, the car starts but the is what sounds like valve clatter sounding like its coming from the exhaust side, but the thing is that it isn't constant. when the car is first started and at idel it is almost not audible, but give the car a little gas and it kicks in, and the car eventually stalls out. i haven't pulled the valve cover to see what may or may not be going on, but i have a feeling that one of the exhaust valves got stuck open and a piston may have smacked it causing it to bend. sound logical? is there any one who has had similar issues, a buddy of mine said it sounds similar to when his BMW started killing rod bearings (also an inline 6). if there is and issue with the top end of the motor what internals do you all recomend? i would end up doing cams, valves, springs, and retainers all together if thats what it is, and i want them to be as close to stock as possible. also did alittle reading and they say that the head gasket and studs are week, who makes good ones for that as well? thank you.