1989 Chrysler New Yorker Bad seals. Can't pass emissions I

Engine Mechanical problem
1989 Chrysler New Yorker 6 cyl Front Wheel Drive Automatic 150k miles

Hi Gentlemen,

I need to pass emissions in Boulder. Car smokes. Notorius Mitsubishi 3L engines all smoked. Bad seals.
Ticket last fall for smoking. Tried to replace the seals but guides were stuck in the heads, so need to replace the heads.

Question; Other than a compression(blow by, cylinder leak down.I think they're all the same?) Test to r/o piston/ring source of smoking what other test should I run to make sure that if I do spend the time and money to replace the heads, that it will pass emissions?

I've been told to replace the water pump, timing belt and all gaskets ($150 kit) when I replace the heads.
Somebody in Erie can do the heads for 40 each-what do you think?

Tried Bardahl's honey. No good.

Smoking worse in summer waiting at stop llights in downtown Boulder. It engulfs me. And other cars look at me with angry eyes! I can also see it in rear mirror as I travel down the road. Can't quite pinpoint when it smokes the worst though. I know this. It is more noticeable in the summer when the engine gets hot.

Ok now in the winter.

updated 12/23/09
Thanks so much for your advice. It appears as if you are local near Boulder, Colorado? From your answer, it appears as if I will need 'major' engine repair by mid January to pass emissions in Boulder County.

I have applied to the Emission's Department in Colorado for a contest to win a small grant to get this fixed. I will need a lot more-I'm guessing close to twelve to thirteen hundred dollars to replace the heads timing belt, water pump, gaksets and seals.

I am currently a resident manager at a shelter in Boulder. Is there a private citizen or start-up shop that you know of that would be willing to do this much more cheaply if I help? Is there an automotive school that could do it for next to nothing? Any other grants available?

Regards

Wade