Well, I guess I'm necroing this thread just to add my 2 cents on the game
I was about to say that 1.05 version of the game is less buggy.... but then I defeated the headless (while he was in the "nemesis" mode) while being at 0HP. Which was fallowed by rockets phasing throu him on the final boss fight.
As for the final boss, the game breaking item in the resting area allievates all frustrations with it - just at any point between saving Korkuma (Colkuma? Korukuma? The science guy) and final sequence, go to the back of resting area and interact with washing machine on the left 10 times. The item gives 10x dmg boost. I'm not gonna make excuses, I've beaten the boss once legitimately, and that was once too much, fuck that rocket dodging bullet sponge.
As for True Ending - as Qscaxz41 mentioned, you need rocket launcher and a rocket. That's the only flag for true ending (and, of course, defeating the boss) - you don't need to see 2nd headless scene, you don't need to save mercenaries, as long as you open the laser gate and collect 3 rockets behind it on your way out and not use all of them, you'll get the ending.
Kind of mixed feelings on the ending itself - on one hand, it's a good moment to do the reveal. On the other hand, in-world, the Normal ending is better than the True one (with Vice-Head getting his comeuppance).