Well you are right, 10/3 will allow 220, but you only have 30amps. Wire the receptacles on a different circuit than the lights. If you trip a breaker running a power tool, you won't be in the dark getting to the breaker box, or looking for the problem. If I was going to the effort, the least I would run is for 60amps of power(100amps is better). That maybe a little overkill, but hey, if you have a trench to dig and fill, you might as well do it right. I have a 6hp air compressor, window A.C. (for humidity control in the summer), glass bead booth, 10pr of 2 tube 40watt fluorescent lights, welder and the usual grinders, drill press, etc.
When I did it, I ran water, TV cable, 6pr. telephone wire and of course gas. The 6pr. telephone wire made it nice for the garage door opener, that I can control from the house and of course telephone. I can also monitor the shed with an intercom. I did run a 12/3 for a light in the garage that I can control at the house and garage(3-way switches). With all of this, I can monitor the garage, if I feel something is wrong, I can turn on the lights in it, open the overhead door and stand at house with a shotgun in case there are varmints in there getting ready to run.
Yes, they do make gas heaters for LP that are vented. But, you might as well get a larger cyl. and you can buy LP when the price is down in the summer. Around here they are charging .70 a foot for trenching. My workshop is right at 80' behind the house, so it would cost nearly $60 for the trench. I really like the space heater. I can set a pot of water on it to heat the water and I have a wire above it to hang painted parts to dry. I really like the no noise!