Manufacturing tolerances are just that, tolerances (+ or -). Many manufacturers will match pistons and cylinders to get the right clearance when they assemble an engine. It looks like you may have had a tighter jug and then put in a slightly oversize piston.
The piston is tapered at the top to allow for heat expansion. The bottom of the skirt is symmetrical and got a bit tight when it got hot. Since it didn't seize when you were using it, it is probably 'fitted' properly now. You can always take a bit of emery cloth to those high spots if you're concerned. Perhaps the expanded piston caused the loss of power you noticed. The extra friction from the expanded piston will cause a drop in power, I've seen it before.
I don't see chips on the side of the piston, just the ends of the hatch marks. The rings and cylinder don't have any scores, so it doesn't appear anything got between them.
On two-stroke engines, rings will often wear quite rapidly where the bridge between the ports protrudes in with less piston/ring clearance. That's because the bridge will run cooler with mixture cooling both sides of the bridge and the bridge doesn't expand at the same rate as other parts of the cylinder. Open port cylinders are notorious for that type of ring wear. I don't see the tell tale carbon track on the cylinder that indicates a notched ring, but it is something to check.
A 40 psi drop in compression is considerable and I can't see anything in the photos that would explain it. Perhaps you had some assembly lube still in the cylinder when you first checked it. That would be easy enough to check, just put it back together with some more assembly lube and re-check the compression, then check it again after running it a while.
