Small paper notes found with the heads by ambulance workers near the town of Baquba identified one as Sheikh Abdel Aziz al-Mashhadani, the imam of a Sunni mosque near Baghdad. The note accused him of killing four Shia physicians.
Like so many others, the eight were victims of the sectarian violence that has pushed Iraq towards civil war.
Three weeks ago the family of the seven cousins received a telephone call saying a relative had been in an accident, needed blood and was lying in a Shia-run hospital, a relative said.
"Seven cousins went to save him and that's the last we saw of them," said the relative.
The discovery came at the start of a day that ended with another outbreak of violence in the city of Basra as a suicide bomb claimed 28 lives.
The explosion occurred late in the day when a large number of people were in the main square of the city, part of the southern region patrolled by British forces.
Hundreds of people gathered around the blast site, which was drenched in blood and covered with the charred remains of several vehicles.
Scores of armed police officers and firefighters tried to keep the crowds away from the site.
It was unclear who was responsible for the blast but Basra has seen growing violence and unrest recently.Reuse content