I would check the syntax. If you want to have items filtered by the Headline drop down value, it needs to render as:
You may want to do some of this programatically, have a hidden text filter that takes the Text box and the drop down list and builds the lucene query text and populates the hidden text filter.
So for instance, if they type "Hello", it would populate the search with "+Hello"
If they type in "Hello" but select "Search Headline Only", it would populate "+Headline('Hello')"
Something like that.