Sounds like a complete overhaul with either replacing the block or sleeving the one you have. Get it right the first time.

 

The machine shop should let you know how your cylinders look as far as warping and damage goes, but if your cylinders are wore out then you can't go over .040" bore because your cylinder walls will be too thin and overheating will occur (unless you sleeve them) But if your block is ok I would definitely replace the pistons and have the rods checked, the clearances are so minut it takes little to nothing to screw up an eng. my feelings have always been its better to be safe than sorry, if money permits anyway lol. Good luck and keep us posted.

 

In theory pistons are not supposed to touch the side of the cylinder but in real life they do. That's why they make teflon coated pistons. It happens but if there is too much heat the pistons skirts will get all scuffed up.

 

do the scratches catch ur finger nails? if so and not to deep and the bores are within tolerance take some 800-1000 grit wet sand paper and knock down the scratches!