OK, give me the bad news. Is it the water pump? Wouldn't surprise me if it is because I suspect it wasn't replaced when the timing belt was done (long before I took ownership). If the water pump has gone, then I might as well get the timing belt done at the same time since it appears that it needs to be removed it to get access anyway.
Viewed from underneath

IMG_0329 by Guran5, on Flickr
Viewed from the top

IMG_0332 by Guran5, on Flickr