86 was a split year, and I owned a car that originally had a solid lifter engine, despite being a MY86. However, it was a Golf. (And, I put a solid lifter engine out of an 85 Jetta in.)
So, this car has become a project. You'll want to drive your other vehicles to work for now.
You'll need a manual from Bentley Publishers, the 1985-1992 Golf and Jetta manual. That's the best one you can get for this car.
The minimum damage is to the valves, and if it's a solid lifter engine, the lifters and cam will be damaged as well. I would contact
Franko6, he does great work with these heads. If anyone can salvage the head, it'll be him.
You may also need pistons and possibly rods. You'll need to inspect the pistons and their protrusion to see what's needed there.
As for the timing belt components, I don't have a parts list handy, but in my experience,
Autohaus Arizona is a great place to get parts for these cars. Look at an A3/B4 timing belt kit for what KINDS of components you need - the setup is very similar - and then look for the versions of those parts for your engine. I can look up the part numbers this evening, I don't have access to ETKA right now.