Sounds like you had a pretty nasty air bubble, and when the thermostat opened, coolant flowed.
Pop went that weasel.
I've never heard or seen of a KA having a bad head gasket cause overheating. It is a common thing across a lot of cars, but I've never personally heard of or witnessed it happen on KA's.
You can keep the radiator cap off while letting it warm up. But as it does all that will happen is the coolant will expand and start to flow out, or as what happened in your case, gush out rather violently. I personally fill up, fire it up, once it starts spilling out a little bit cap it off, get up to temp. Rev a couple times, shut her down, let her cool, pull cap off and top off if necessary.
First thing you need to realize though, is it isn't an "overflow" bottle. It's called a coolant reservoir for a reason. If the coolant pressure is too high, it purges it over to there. If a vacuum is created because of a small coolant leak, as the engine cools it will pull coolant from it. Get a proper coolant res on there. It isn't crucial, but it is part of a properly working system.
Also, I see no mention of a fan shroud for the radiator fan. That is a possible culprit. Get a shroud, put on your shroud, or convert to electric.
Also, backflush the WHOLE system, and not just the rad. Pull off upper radiator hose. Attach hose, turn on the water. Thermostat must be out for this. And then run some actual cooling system flush. Cheapo zerex stuff will be fine. a blocked heater core could cause overheating.
Go from there. If you had a bad head gasket, either you'd have coolant in your oil, oil in your coolant, a loss of compression, or coolant or oil entering the combustion chamber, or oil/coolant dripping down the side of the block. I've run the KA ragged into the red, and it's headgasket is fine. Not recommended, but myself, my friends, and even David B on here as admitted to beating the piss outta the KA while overheating with no ill effects.
One thing left to mention. Is it overheating while moving, instead of sitting still? Because if you took it out and drove it at 35 steady and it still overheats. It's a flow problem. If it doesn't overheat while moving, it's a radiator fan/air flow problem.