Re the heads, if it passes the pressure test and the valves have no wear in the guides, all that's necessary is to replace the stem seals and surface the head (They need to straighten the head if the warp is large, and they will tell you what "large" is). If you have a valve spring compressor, you can replace the seals and check the valve stems for side to side slop. I would also soak the lifters in diesel fuel to clean them up, and prime them with diesel fuel before installing them. Download the fsm from mitusbishilinks.com for the 89 model for the procedure in the cylinder head section.

I would rotate the motor to check the cylinder wall condition - look to make sure the cross hatch homing pattern is still good everywhere, especially on the thrust side (opposite the direction of rotation - pside in this case. Also inspect for a step large enough to catch your fingernail at the top of the ring stroke. Missing honing pattern or a marked step means the bore is worn.

Drain the oil out now and look for water in it. If there's water, the bearings may be acid etched from coolant contamination.

The block deck must be squeaky clean, all gasket residue removed. This takes at least a couple of hours of razor scraper work with gasket remover. Then before head install, clean the deck and head gasket surfaces with acetone which you can buy at Home Depot paint dept.

Clean out the head bolt holes with a bottoming tap, then install all the head bolts in the clean holes until they just barely touch the bottom. Measure bolt length from bottom of head to block deck. Deduct washer thickness. This is "A". Measure the head thickness at the head bolt hole ("B"). B must be greater than A by at least .040, or you will not get proper clamping force on the head gasket, and it will blow again in short order.

Note that there is a revised head bolt torque spec, I think it's 80ft lbs.

Resealing the lower intake is tricky because of the narrow vee. I always use Indian Head or KopperKoat gasket sealer with the copper stuff in it. Then I tighten the fasteners just past finger tight, tap the mani with a rubber mallet starting in the center all along the upper surface, tighten to half torque and repeat the tapping routine, then to final torque setiing.

Install a new water pump and front main seal and revised crank pulley bolt. Replace front and back halves of the water pump, and make sure you replace the oring on the back that seals the metal tube that runs in the vee. Replace all the hoses while the head is off - they've been overpressurized and maltreated by the leaking combustion products, and have several years of dry rotting while sitting empty. Ditto the acc belts and timing belt, and replace the front main seal, too, to be redundant. You may have to split the crank timing cog to get it off - it's powdered metal and if you drill it and drive in a tapered punch, it will split easily. You can't pry it off without damaging the oil pump, and there's no room for a puller.

Have the radiator rodded out, about a hundred bucks at a good radiator shop. That is a prime suspect for the cause of the head gasket failure. I'd think about replacing the fan clutch too. It should be very stiff to turn by hand if it's good...

I'm sure I've forgotten somthing...