Thanks for the input -- so here's my plan of attack.
1.) I have a friend who owns a shop in Brooklyn, I trust his advice. He recommended NOT to buy a new OEM head. He said that if I wanted to replace the head, to find a used one and have it reconditioned. He said that the new head would not be broken in, which is why a used one would be better.
I asked him what he would do if he owned the truck and planned on owning it forever. He said he would have the head pulled and sent off to a machine shop to fix the cracks and essentially recondition it. They'd be able to find all hidden cracks which aren't showing, etc. and would re-machine the mating surfaces. He quoted me labor costs around $1000, which is cheaper than a new OEM head.
He also said that fixing/remanufacturing the original head that came with the block is my best bet, as it matches the block precisely in terms of fit and mileage. I suppose that makes sense -- anyone think differently?
Manhattan Toyota (10th and 47th) quoted me a new head at $1600, but you can find them online for $1100. Kinda ridiculous, but the guys at Manhattan Toyota, in the parts department, are pretty awesome and the service there rocks, which is unusual for NYC where everyone is an a******! Ha. They gave me the numbers for some machin shops in brooklyn that they send their heads to. I can give you guys the number if you want.
I still think I'm going to follow the advice of my friend Peter, I have known him for 10 years and have seen him build up just about every kind of ridiculous car. If he knows a guy he trusts, then I am inclined to go with him.
I believe I am burning some coolant incidently; after a new thermostat, hoses and flush I am seeing some white smoke in the morning, but it abates once the engine warms up. My friend also recommended that I replace the timing chain and guides while I'm at it. Thanks to all who mentioned that I don't need new valves/springs, etc.
I did purchase a full engine gasket kit, and will be buying a new timing chain and guides (via Man-A-Fre), and plan on having the work done ASAP. My friend said that the cracks could grow as the weather around here gets colder.
As an aside, I'm noticing a rattling noise when I turn the engine over in the morning -- just when it starts up. I hear a quick rattle which sounds like the timing belt (CHAIN, yes) only on start up. I was thinking I dropped a washer or something when I did the valve cover seal! Hope that's not the case. Anyone hear any noises like this during a cold start in the morning? For some reason I think it's the timing chain.
Thanks all for the great advice and words of encouragement. Much appreciated!