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What is the best way to clean cloudy headlights. What grit sandpaper? And what kind of solevent?

There are several products that you can buy for this, though there is no permanent fix.

I’d start with something mild like Meguiar’s PlastX. If that doesn’t work you can get a kit complete with sanding pads and polishing compounds. I’ve been using Meguiar’s for a long time, and just repolish every few months.

buy a can of rubbing compound .get the “rough” stuff . wet rag and rub. then put on a coat of wax. that been working for me

I’ve used plastix but here is a method supposed to work:

"Wet a rag with lacquer thinner, wet but not dripping… you don’t wanna drip any of the thinner on your paint. Make a few passes over the lens and this melts the haze out almost immediately. Let it dry. This is gonna look about 100% better right now if you stopped here. After it dried I took a 2000 grit Abralon pad and wet sanded the lens to smooth out any ripples left by remelting the polycarbonate with the thinner. Wipe it clean and put a good coat of Brasso on a piece of flannel and start rubbing. Rub it until it’s dry, then polish it with a clean piece of flannel. That’s it. It’s pretty amazing folks… beats paying a couple hundred per side for new assemblies and cheaper than buying a kit.

For what it’s worth, Brasso has been used to polish scratches out of airplane canopies for years and years." from the Wood Works

I’d forgotten about Brasso, its also used by plastic model makers to polish out fine sanding marks.

Best is to insist the auto makers go back to sealed beam headlights, cheap, easy to replace and did not suffer the cloudy issues. The best headlights I have ever driven were US E-code sealed beam.