Hello, and welcome to PsG!
When cropping for US size passports, I use the center mark of the crop tool to measure the head. I place the top of the crop tool on top of the hair, then scale the crop so that the center is lower than the mouth, but higher than the chin. This is for the overall size of the crop.
Also, you should have the eyes between 1 1/8" and 1 3/8" from the bottom of the pic. I then move the crop marquee vertically to eyeball (no pun intended) the vertical position, again, using the center mark of the crop tool as a reference.
In CS5, you can get a grid in the crop tool. It might help.
I also notice that the photo has been edited to remove the background. I don't think this would work.
Take another photo in front of a white or light grey background, and restrict the Photoshop editing to the crop.
Here is the link to the PDF with the specifications:
http://travel.state.gov/pdf/Photo Guide 10-01-04.pdf
Hope this helps!
To change the unit of the rulers, double-click in them.