Shade tree guess
Don't take this as gospel, just an idea. You don't give a whole lot of useful info like miles on the engine, previous events/maintenance and other etc so it makes this kinda tough.
I'd say there's at least a chance that the engine has overheated at least once, maybe warped the head slightly to cause the need to fix your coolant leakage/gasket problems. Maybe it was a simple head gasket leak, but your other info makes me think maybe not.
To directly answer your topic question, "What does a gas smell in the oil mean?", gas in your oil means it is getting there. Simple as that. Carbon in #5 cylinder tells you that's where the gas isn't completely combusting so that's where that liquid fuel could still survive. Your head gasket could have had the leak at #5, causing this, but that would not get fuel into your oil. That's why I think there's more to this, and why an overheating may have occured.
I'd say your rings in cyl #5 are shot, and gas is leaking past them to drain into the oilpan. While you were taking the trouble to bandage your top end it looks like you shoulda gone ahead and done the whole overhaul; put new rings in, rehone the cylinders, etc.
Hopefully a more knowledgeable modern-techno-engine nerd can give you better news, but that's how I would have diagnosed my old 289, and I would have been right back then. Maybe there are different possibilities now.
Good luck, hope it's a relatively cheap fix.
[Edited by GJarrett on 06-29-2000 at 06:41 PM]