Just a few words of caution on head repair:
1) 90% of all diesel heads with over 100k on them probably need new exhaust valves. This is a tip I picked up from Jack Ewald at VWdieselparts.net, and every head I've set out has needed them. Whether or not you planned on doing a valve job, now might be a good time to do it. Chances are, the guides need to be replaced, as do the seals. Just a thought.
2) As burn your money noted, the cracks between the valves are not the end of the world, unless they go into the chamber
3) Make sure to find out what your ''dude" plans on doing to the head for the gasket job. Chances are very good that your head is warped. You cannot simply put on a new head gasket (the usual assumption is a 'thicker' one) on the motor and expect it to be alright. If the head is lightly warped, you can probably get away with a resurface. This must be done one of two ways: profession grinder (not a belt sander), or milled with the pre-chamber pucks removed.
If the head is severely warped, say 7 thousandths or more, you need to have the head straightened. The warp does not just affect the head surface on an OHC engine. The warp extends all the way up to the cam journals. Now, the motor may run fine, but you end up wearing the journals, the cam and the lifters when you resurface instead of straighten. Even with straightening, you may have to resurface and line-bore the cam journals to relieve the stress on the cam.
So, it's a simple job, but there are levels of knowledge that most people are unaware of. When I do a head job, the labor and parts on the head alone cost about $400-600 (for outside work). That does not include the labor to remove and install it.
So, $600 is not a bad price, but it depends on what he's planning on doing. If he thinks he can clean the head, put on a new gasket and you're home free: then I'd go running.
Just a thought.