Highly likely to be a head gasket, at least a breakthrough between the oil, water passage[s] and the combustion chamber.
As is typical with many Datsun/Nissan engines, contaminants in the cooling system accumulate at the lowest point of the head, cylinder #4.
You could try draining & flushing the coolant and treating the engine with Bars Leaks or similar, but even if it works it will only be a temporary solution.
I assume it has an iron head which should resist the corrosion whereas an alloy head may require welding to repair the rot.
Not a huge job to remove/replace the head being a pushrod engine.
You won't know the damage until you lift off the head
