It could need a bore job as I am assuming it's not nic plated. You have a bunch of aluminum transfer on the cylinder wall. You can clean it with some acid and see if there are any ridges that were worn into the cylinder wall. That top scuff is petty high and I doubt the ring contacts it with the wash it shows on the top of the cylinder. You could probably get by with that If it is fairly ridge free and you can hone it and put in a new piston and rings. I'm also guessing it is an optical illusion but make sure that isn't metal stuck under the top valve. I have no idea on the cost of parts but it may be cheaper buying a new motor. I tend to run things until they are dead if it's a cheap fix and they don't owe me anything.