2001 2.2l #1 cylinder plug is melted down! Please help! Timing?!?

So my wife was driving to work in her 2001 cavalier w/ 2.2l. She pulled over because the car was surging at high rpms. I checked it out and the car sounded like it was running on only 3 cylinders and when I pulled the #1 wire the car ran the same. We decided to limp the car back home. Once home pulled the #1 spark plug and noticed the the end of it was completely melted down including the threads, on one side all but a 1/4" of the threads was gone. This obviously stripped my head completely. I tried to turn a new plug into what was left of the threads and the compression just pushed the plug out. So I am going to replace the head. The cylinder walls and pistons look good, and the valves on that cylinder look good. The only possible reason that I can come up with for the plug to melt like it did is preignition. What should I check to find the cause of that? Coil packs? Cam or Crank position sensors? Timing chain? I'm considering replacing the timing chain anyway because the car has 150000 miles on it. Anything else I should change for maintenace while the engine is torn apart?