Been there, done that!
Last year I went through this in number six cylinder. The head was not cracked, it was corroded through. It would be worth your while to ship the head to Greg Atwell in Dallas. He will weld it up, surface, do a fresh valve job with new guides for about $550. He is EXTREMELY good and trustworthy. His phone number is (214) 358 3002. He did my head and I have put about 30,000 flawless miles on it since.
These engines come apart and go back together extremely well. Fix the head properly, put it back on and you will get many more miles of service.
The labor for removing and replacing the head should be roughly in the neighborhood of $1,000. Don't pay $3,500 for this job.
[Edited by LarryBible on 06-22-2001 at 07:24 AM]