Sounds like it... but you said dripping on the starter and misting on the tank.
That doesn't sound like it.
Was there work done on it recently? I'm asking because a common issue is installing the rocker box cover gasket. If it is inverted and installed improperly, it will blow oil as you described.
How are you determining the 7-8 hp loss?
To determine if the gasket is in wrong… take a flash light and look real close at the leading edge of each cover (the edge in the front of each jug) the gasket will be protruding about ¼ of an inch. If it is… it is in wrong.
That's your rocker box gasket. About an hour job to replace. Doesn't look like the head gasket is blown to me. If the head gasket was blown it wouldn't leak upwards . All of the oil is coming from the rocker gasket and dripping down.
"If you spin a Chinese man around in circles, does he become disoriented?"
Herd member #00097
Why are they called hot water heaters?