Well, LBS agreed that loose-bearing was the way to go for the headset replacement - they're cheap, the bearings are cheap, and you can just replace the bearings wholesale every time you open the thing up. The old headset was a cartridge system which must have lasted ten years, but the bottom cartridge was just destroyed by moisture; that coupled with the advice in this thread has me installing fenders this weekend. The headset replacement was a bit of an adventure, but now I can add another part of the bike to the list of pieces I know how to disassemble, overhaul and replace. When I pull the bottom bracket apart myself, I'll have covered basically everything! Thanks everybody for the good advice.