Time for a Long block?

Hey everyone I was hoping you could help me come to a decision; but first some background.

The Car: 1969 Plymouth Valiant I bought from a junk yard a few years ago. It has a 225 I upgraded to a Super Six with a 2 ¼ exhaust and a HEI. Still runs; I driven it most every day since the upgrades.

The Problem: The car starts fine, cold or hot, but lacks power and stalls if I give it too much gas from a stop. Now I can turn a wrench pretty good but I couldn’t diagnose my way out of a paper bag, so I finally broke down and took it to a mechanic someone recommended. Well the diagnosis is in; no compression on cylinders 1, 2 and 3; valve leakage and crank case leakage.

Questions
1. How much trouble am I in?
2. Could the trouble be in the block or might I get away with replacing the rings and rebuilding the head?
3.What else should I replace once I have it open?

Any advice would be helpful.