I picked up a 97 Subaru Outback at a very low price. I knew the head gaskets were bad and for the price I thought it would be a fun project. I am planning to replace the engine but thought it might be worth a try to put a sealer in it to see what would happen. the leak happens when after a few minutes of running at normal temperature it shoots up to max temp and blows out the overflow tank.I suspect it does this because the head is aluminum and the head might flex enough to blow out combustion gases into the cooling system. I'm not sure which type of sealer to use on it or how to use in this type of application.
Sealant won't fix your issues. It will continue to blow out the reservoir. Sealant rarely if ever will fix a head gasket issue. It might, plug up the radiator if there is a small hole in it, but I still wouldn't trust it to do this. All the sealant will successfully do is plug up the coolant passages in the engine. Pressures inside the cylinder during the power stroke will continue to blow out through whatever path is there and continue to pressurize your cooling system. No amount of sealant will fix this.
As far as the engine, if you have the money to replace the engine and don't mind it, go for it. However, a head gasket job, while a bit of work, might be a better step to get things fixed. It would sure cost a lot less (if it work), and the learning factor would be a lot higher.