While you are there get those valve seals changed, much easier to do with the head off and for the valve cover gasket make sure you pay the extra coin for the steel reinforced gasket. Heck for what these engines go for used in the jy you could probably get another engine, do everything you want to it, maybe toss in a turbo reciprocating assembly for future use and then sell the engine in there now to recover cost when complete. Ive done this many times in the past to ensure that I can drive the car right up to the engine swap, then swap the engine in a day or two and have minimal down time, I have done engine replacements in these cars and I will say that I can get the 2.3 out and another in its place faster than what I had to spend doing headgasket, etc. I would be concerned knowing that it had seized up in the past. Just my .02 and good luck with whatever route you take. Edit: The oil smell could just be the valve cover leaking, it is common for them to leak at the PS rear corner and then to get down into the exhaust.