Id change the headgaskets, they are much easier than the exhaust one. May as well do both if you arent sure about the other cylinder being totally operational too. Dumpster is out of the question, or a long way from considering that at least.
Plane the heads when they are off, its crucial. Put some light sandpaper on a mirror or piece of glass and move the head in a figure 8 pattern until the whole face is shiny (that means no low patches are left).
Its worth checking the crankcase faces with a straight edge while you have the heads off, but its rarely the issue. The heads have warped a bit almost the whole time ive checked them