D2 5U cylinder head repair

I am in the process of overhauling the diesel engine cylinder head on my 5U D2, the plan was to have the head tested for cracks, then I would replace the valves and guides, and grind the valve seats back to spec. After thoroughly cleaning the head I noticed some pitting around the exhaust valve seat on cylinder #2. It looks as if this engine sat with some moisture in this cylinder at one time, and some of the pitting goes through the valve seat area. The machine shop says they may be able to put valve seat inserts in that would correct the problem. I've had this done on tractor heads before and have had no troubles. I was wondering if this process can be done on these engines, or if I should be looking for another cylinder head. I've already been through the rest of the diesel engine, so considering the time already spent on this project I want to fix it right.

Valve seat inserts are a very acceptable (maybe even preferred) repair.

Old Magnet, thank you for the reply. I am taking the head in to have the inserts put in at the end of the week. Without the inserts I was afraid I would have had to remove too much material from the seat to get it uniform again.