Definitely use new head bolts, and have the heads checked/surfaced at a machine shop.

A new KS is up to you, if you have more time than money I would just swap the KS wire, and see what happens. The dealership recommends replacing the KS do to the the work that would have to be done again to get to the KS if it goes bad.

The FSM will walk you through the process step by step, it isn't a hard job, just time consuming.

More than tread lightly. Leave it like you were never there, nor anyone else.
'90 X-cab 4.88's 33 BFG AT's, rr ARB, Headers, Ignition upgrade, cold air induction.
'91 X-cab 5.29's 315's BFG MT's, rr ARB, custom bumper and flatbed