[Zero10]

The first problem that I see with the 16V head, is the combustion chamber volume in the head is MUCH lower on the 16V head. your 85.5NA will have a 9.6:1 compression ratio, the 16V's will have a 10.9:1 (IIRC) compression ratio. In order to bring this down, to help prevent detonation, Porsche dished the 16V pistons deeper than the 8V pistons, so, if you use 8V pistons, and a 16V head, I would imagine it could bump your compression ratio has high as 13:1, which we all know usually means bad news.
On top of that, you would have to change your fuel mapping and spark timing to manage such a high compression ratio, just not worth the trouble.

IMO, go with a 16V engine, or stick with your 8V head. No huge gains to be had by swapping the 16V head on. I also believe Tshabet is correct on the water jackets being different, but I am not 100% sure on that.

If nothing is bent on the 8V head, figure about $200 for a rebuild, plus valve guides and seals (~$40?), which isn't too bad. Then (of course) you'll need a head gasket set, which is about $100.

Rebuilding a 16V head, I don't know, never had one done.