number 1 cylinder was reporting missfires. Checked compression and it was down to 125, others are at 170-175. Mechanic told me its most likely a burnt valve. The motor has 170k. Is it worth doing a head job on this or is the lower end going to go once the upper is all tightened up?

Is the head swap more difficult then most?

 

If you have the right tools and time, you should be able to pull the air plenum and passenger side head off without too much of a hitch. Depending on how badly yer engine was abused, the bottom end should be fine.