Joe, the bike looks like it's in good shape from the pix. My suggestion is to just make sure everything that's supposed to move is well greased and the parts that are supposed to hold things together are tight to specs.
I found this website on headshoks, the guy has apparently downloaded all the manuals; I also found a site on Sheldon Brown's web page where a contributor takes apart a headshok on a fatty fork.
Cannondale Headshok Repair and Maintenance
Cannondale Super Fatty M Headshok Suspension Fork Service/Overhaul Instructions Headshock
It looks complex, but it's just parts, and I know you're pretty handy...
The only problem is the rarity of these things. Even back in the day they were pretty rare. (There was so much innovation in those days, and Rock Shox were ruling the day so everybody just sort of copied the winner.. Headshoks had a lot going for them, stiff as a truss bridge, and the roller bearings reduced stiction to almost zero, but they looked a little odd and they looked heavy. Even the might of the Cannondale marketing department, with the mighty Volvo Cannondale Team winning lots of races couldn't overcome the oddity of the thing. )
I think if you got that bike cleaned up and lubed it would make a great toolin' around the hangar steed. For more information, there's a bike shop here that has a museum of old mountain bikes.
About | Velocult They could give you some more info. Warning, looking at the vintage bikes on this site can be addictive. jyl hangs out here a lot, so you know it's a quality shop. (They moved up here lock stock and barrel from San Diego a couple of years ago...)