Motorcycle Repair: 1998 Sportster 1200 Custom, gasket leaks, exhaust gasket

Question
I have a 1998 Sportster 1200 Custom with 21,000 miles. Bike is stock with Dragtron/K&N filter, jetted 45/180 with SE II mufflers. I tore the top end down a couple of weeks ago because the bike felt like it did not have the same power as it used to have. I found that the exhaust gasket on the front head was not sealed correctly, this is what I believe caused the power loss. Heads have carbon and cylinders are glazed and pistons have slight scuffing. I have less than a grand to spend on the bike and would like to have a
dependable daily rider with power/torque in the lower rpms. I am planning on buying the SE ignition module and was thinking of upgrading cams since the bike is from California and I read that they have "special" cams.
What would you recommend that I do to get the most power and  dependability?
Valve job?  Bore cylinders/new pistons?  Cams?  Ignition module?

I appreciate the help.  

Answer
I'm sure you know by now that you didn't need a top end job with only 21K miles.  The carbon, glazing, and scuffing is normal wear.  You could put it back together without doing anything and be fine.  But a decarbonizing, valve job, and a set of rings wouldn't hurt.  Just run a ball hone through the cylinders and replace the rings.  Why waste money on a '98 with 21K miles?  Wanting the most power AND dependability are opposites.  I wouldn't waste money on cams or an ignition module.  Just make sure you use all the new style "cometic" gaskets so you don't ever have rocker box or base gasket leaks.  Remember, any money you spend on that bike you will NOT get back in the sale price.