So my coupe's dead... (long post)

Last week, started developing a "ticking" sound under fairly hard acceleration. Not the best description, but its the best I can do. I believe now it may be detonation? On my way to work, problem became constant and now car won't accelerate, only making the noise louder. I coasted to a stoplight, where the car died and wouldn't start. Smoke appeared to be coming from under the drivers side head. Towed car to shop and their diagnosis was -
No coolant, leak seems to be coming from timing chain cover. Also failed block test, likely blown head gaskets. Estimate to replace heads, valve job, new gaskets and new timing cover gasket about $2k. I said thanks but towed it home to tackle myself. Time isn't a big factor as I already bought a dd, but would love to get it running again. My plan is to get a pump that connects to upper radiator and see where the leak is coming from and replace parts as necessary. If its the timing cover gasket (seems like common occurance from searching) could that have caused the block test failure as well? Or should I just get new head gaskets too. The shop said if I go that route, I should bring the heads in to have them do a valve job. Is this necessary? From their testing (without taking it apart) they said the bottom end "should" be ok. Am I missing anything from my troubleshooting logic? Thanks for your input.

You're right, upgrading as things broke was the original intent when I bought the car. Heads were next anyway since its got an e-cam w/ stock heads. Unfortunately, it (I) put me in a bad spot where I had to have transportation and I broke down and bought a new Lexus. Wife says I can't have 2 toys.... So at this point, I'm either going to get it running (correctly) and try to sell it or just start parting it out.
If the problem is just a $20 gasket, getting it running again shouldn't be too much of a problem, but I just wanted to see if my description rang any bells with you guys. Thanks for the input, keep it coming.

Thanks for the info guys, been a while since I've had time to look at it but here's the latest:
I put a pressure tester on the radiator cap and the leak seems to be coming from the back of the water pump. From what I gather, the slow dripping leak is usually a sign of a bad pump and the coolant is just dripping to the back? In either case, a water pump is relatively cheap so I will replace anyway.
As far as the heads, a friend at work told me to look at the oil and check for coolant in the oil. I just checked and didn't notice any. Based on that, he said the gaskets might be ok. Any truth to that? I'm getting new gaskets from another friend cheap, but don't want to tear into the heads unless I have to.