It looks like the muffler gasket had a piece missing. It has probably sucked dirt back in through there to cause the scoring.
Your on the right track- that cylinder and piston clearly aren’t going to ever be 100%. But they should work just fine for a good while.
No use in replacing piston or cylinder unless you replace both. Otherwise- clean up and run what you’ve got provided it still
Makes good compression.
While she’s apart might as well take preventative measures. Make sure you clean the ring groove as I’m sure it has some carbon build up in there. Best way to do that is to simple use the old ring.... break it in half and use it to scrape out the ring groove. Carbon build up in the groove can cause you to snag a ring later.
Also- get the carbon out of that exhaust port while you have it apart.... preventing more carbon scoring. You can do that with about anything. Sandpaper, file, dremmel and wire wheel... just make sure after you’re done to clean inside of cylinder and smooth the port on the cylinder wall. In case you left a slight lip.
Be careful reusing old piston circlips. If they were at all deformed in removal get new ones.
Then.... complete a muffler mod while you have it apart
I’ve had a few older saws that had carbon scoring, held good compression and ran for years.
As on any old, worn cylinder..... Tune the saw a but rich (healthy four stroke out of the cut)..... then make chips!
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run the dremmel/ emery cloth at a nice slow-med speed. Last pass I lightly oil cylinder walls and give it one more pass.
Emery cloth is nice because it makes full/even contact with cylinder walls, and isn’t too aggressive. If you have a dremmel give it a go..... and if it cleans up nicely then order a new piston
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