The two-stroke internal combustion engine was once common in many applications. In recent years two-stroke technology has been largely replaced by four-stroke technology due largely to concerns over the greater noise and higher air emissions associated with two-stroke engines. The two-stroke engine configuration has a few advantages, however, that make it indispensable for some applications. Two-stroke engines have a much higher power-to-weight ratio than other engines and they can be operated in any position without problems. This makes the two-stroke engine ideal for use in chain saws, garden trimmers, etc. The simple design of these engines means that all components must be in top shape for proper engine operation and the head gasket is no exception.
Locate the joint between the cylinder head and the cylinder block. The cylinder head is the metal "cap" on top of the engine and is recognizable because the spark plug(s) protrude through this piece. Carefully look down the side of the cylinder block until you see a very fine and straight "crack" that runs completely around the block. The head gasket is inside this joint, and seals the cylinder head to the cylinder block. Carefully examine this joint all the way around the engine. Look for signs of metal discoloration or buildup of black deposits as these can indicate places where the head gasket is leaking.
Check the width of the head/block joint all the way around the engine using a very fine feeler gauge or wire. The gap should be less than 0.001 inches in all places, and ideally it should be effectively so small as to be unmeasurable (i.e. zero inches).
Disconnect the spark plug lead and crank the engine by pulling the starter cord three times. Now listen carefully at the head/block joint for the sound of escaping air. If air is escaping, it means the head gasket is leaking.
Reconnect the spark plug lead and start the engine. Feel around the head/cylinder joint for streams of escaping exhaust gasses. If you find places where a highly pressurized stream of hot gas is escaping it means the head gasket is leaking. Do not put your hand too close to the engine as it will quickly become hot. Be careful as any gasses escaping through the head gasket will also be hot.