I have the head out to replace gasket but the valves look like hell. There is carbon deposits on them. It is really thick on one side. Do I need new valves or can anything be done.

 

Pics? so we can see how bad

 

You might try putting the head back on as-is and doing a seafoam treatment.

 

That is normal. Scrape off most of the carbon or use a wire brush. Carbon on the tops of the valves doesn't affect valve action. As a simple but not absolutely sure test, you could turn the head upside down and rotate the cam until all the valves in the cylinder being tested are closed. Then pour water into the top cylinder area and see if it leaks out through the valves.