Turbo e15et nissan wont rev

I bought a n12 pulsar et turbo on ebay. It wont rev out, is very lethargic, when you take the oil filler cap off the revs at idle drop to almost stall speed. I have noticed condensation on the bottom of the filler cap, and it has used some water so I am thinking the head gasket is failing, but is this the main thing that is holding my little 1.5 screamer from revving past 3 grand clearly? Oh, it doesnt blow any smoke btw.