thanks guys. ended up at Osborne in Murrieta since close an recommended by a couple people also. Upon magnaflux he found a crack near spark plug hole and one near a bolt hole, both on one head. Said has seen people run iron like that anyway, but i opted to replace it at first. Here was the deal though, a Merlin head casting is $600 @ summit, then another $300+ for valve job and parts. (guides very worn in my bad cylinder that you can pull the valve out half way and wiggle it a lot - impossible to hold compression).
But then to Osbornes credit he said if you are gonna have $900+ in fixing iron heads, even though they are Merlins, why not look into aluminum. Great guy there for sure.
I looked into aluminum and found some white performance heads ready to bolt on for about a grand. Makes all the sense in the world for me. Spoke to the owner, Fred White - really cool guy. Anyhow - just recommending both Osborne in Murrieta for A+ honesty and White performance in TN for a solid deal on a built set of heads.
http://shop.whiteperformance.com/BBC-454-496-ALUM-HEADS-119cc-CHAMBER-320cc-RUNNER-HYD-ROLLER-RP-320-274.htm