Looks like the heads labeled 1&2 are toast. When you can see the gap opening up it means that they are worn out and have to be replaced.
After seeing the way everything is set up (BTW, very cool unit!), I would advise you to get the exact replacements. It doesn't look like there are provisions for much adjustment so having heads with the exact shape and size is going to make a huge difference in the way the unit sounds.
When it comes to magnetic tape, the interface between the tape and head makes all the difference in both sound and head wear. Not enough intimate contact and there will be signal loss. Too much contact will skew the frequency response and increase head wear.
The contact also needs to be as consistent from the top of the tape to the bottom so the head needs to be level in regards to the tape or there will also be signal loss and "uneven" head wear.
Considering these issues and the relative lack of head adjustments (compared to a regular tape machine), I think it would be well worth getting heads which are proven to work. Sure, you might be able to find some other heads with the right specs for a little less money but you might be in for tens of hours of hair pulling to get them to fit properly if at all.