You can and it down with 1000, 2000 but those "cracks" in the headlight might be deeper into the headlight.
Whatever you do, you need to seal the headlights. Othewise, the sun will wreck havok again.
You could use clearcoat spray. Some have used a mixture of mineral spirit and spar urethane with great success.
ITT: I teach you how to restore your headlights for 2+ years. [srs] [pics] - Bodybuilding.com Forums
Note: if you decide to polish or make the headlight smoother than 2000, your sealant will peel off.
The mixture of Spar Urethane and Mineral Spirit is the sealant. The mineral spirit is mostly used to dilute the urethane so that when the mixture dries, it does not leave brush marks or lines. Or just use clearcoat spray but buy the non-yellowing clearcoat sprays.
If mine looked like that I would spend the $140 to get new ones.
The down side to spending a lot of time fixing up the outside, is that that inside is often in bad shape also.
On mine I have replaced all the lights except the taillights. Got them all through 1aauto.com and I have been very happy with the parts.