Here's a quick thing to check out when one has leaking heads (that 
would be most of us) and no heat:

This '87 I bought had leaking heads (i knew that) but the drive home 
had no heat. ARRRG.  While I did do my ritual boiling out of the 
heater cores (another post) and fully restored heat I noticed 
something in the process.  The radiator cap was defective.  Passage 
was blocked from the nipple on the cap into the reservoir.  One should 
be able to blow into the nipple, if they're not a smoker.  It's a 
one-way valve so it only lets pressure out after 16 psi is reached.  

Here's my theory:  if that cap is defective, as mine was, when 
coolant leaks out the heads, it is NOT replaced from the overflow 
tank.  Eventually, enough coolant leaks and causes air entrapment in 
the heater cores, hence no heat.  Also, if one is having to bleed the 
system periodically, CHECK THE CAP for operation.  I've got two 
leaking vans but I don't get air entrapment in the system.

BTW when considering head replacement remember a factory VW rebuilt 
long-block is about $2200.  Labor extra.  That's the route I'm going 
when the time comes.