Well if it's .040" you shouldn't have to worry about piston contact with the top of the cylinder. I think I saw a pic in this thread showing a very tiny combustion chamber, so .040" may be what your saw needs. On the other hand, you will have to determine what caused the marks on the top edge of the piston. Any chance there may be some debris inside the saw? Are there corresponding marks in the combustion chamber?
After investigating I think the marks on the cylinder may not be too suspicious, a little carbon build up and once cleaned with a little emery paper there was no actual indents in the piston. The shiny cylinder wall on both exhaust side and intake side correspond with the shape of the skirt so I assume this is piston slap? If so, what is usually the most common cause and is this a major issue? thanks again..