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I just took my 1996 Toyota Caldina in for a service and the mechanic informed me that the radiator cap had melted. He said it could be a symptom of a blown head gasket. However, the car has been running fine - not overheating, sounds fine, fuel consumption is usual etc. The cam belt was changed 40K ago. Could there be another cause?

I can't see how a radiator cap could melt, and especially can't see how it could be related to a blown head gasket.
If the radiator cap seal has melted or perished with age, then the solution would simply be to replace the cap.
There are numerous tests that can be done to check for a blown head gasket, but given the circumstances (ie; no overheating, running fine, presumably not using coolant etc), it doesn't sound like this engine has a blown head gasket.