Can o worms?
There are many varied theories. I'll try and condense:
The head gasket went through a few revisions - the first ones had wee plastic dowels to line up the head and keep it stable - replaced by metal dowels. Yours should be fine (being an S2)
The engine is not cast to the best specs... Some "HGF"'s are actually caused by the head going porus (mine did)
The most glaring one though, is heat cycling. The thermostat in the K is in a location which makes it fine for front engined cars - the engine gets up to temp quickly, but is a problem for mid-engined cars. There's a whole lotta pipework between the radiator and the stat, so when it opens, the engine can get a big slug of cold water - making the metal expand and contract more than it should. That's why I'm fitting this revised thermostat to mine.
At the end of the day, a standard engine should give you no problems if you are careful about warming it properly (don't rev it 'till the water's up to temp and even then give it another 10 minutes to get some heat in the oil) Thrashing it from cold will kill it (unless you're one of the lucky ones)
HTH
