head gasket or cracked radiator?? need help diagnosing!

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I'm helping my son work on his best friend's Impreza, which has a blown head gasket according to a local shop.
It's the double overhead cam engine, automatic tranny.
However, the oil is clean, the insides of the valve covers and the cams look pristine. No evidence of milky oil anywhere. The plugs look good, no fouling at all. When the upper radiator hose was pulled, the coolant looks clean as well. The radiator cap is clean as well, but my son said he did see a "little" mud when he pulled the radiator cap. There is none that I can see in the radiator or the overflow.
Nothing I can see looks like a head gasket issue to me.
Now, here's the weird issue: the radiator was almost dry. I had read that a cracked radiator would let ATF into the coolant. Didn't see any evidence of that, but we pulled the transmission filler/level inspection plug and fluid POURED out. Should it do that?
We pulled the transmission drain plug (briefly) and only clean ATF came out. We only let it run for an instant, though. The Fluid from the fill port was not milky either.
We really don't want to pull the heads for a radiator issue. Any ideas how to narrow down the problem?
 

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