I will dig out my small feeler gauges and see what kind of clearance I have. The piston is a pretty tight fit currently. The mark you see by the ports does appear to be where the piston was parked for some time. So far I have only cleaned the cylinder with a semi abrasive dish sponge in a cross hatch manner at the rusty spots so as not to remove metal only rust. I would buy a decent hone if I thought it could be made whole again with the current piston and new rings, worked on my old 1970 Skidoo 335 snow mobile years ago. Thanks again for the encouragement. I really want to make this bike sing again. Will report back soon.

So after messing with this a little bit I find I can put a .005 feeler between the skirt about half way between exhaust port and cylinder top. I assume this is too much for me to try a light hone and new rings?
 

5 thou is getting up there, about double recommended so she'll audibly rattle. If it's a wiseco piston it'll shut up a bit as it expands. You are showing the blade only just in there but can you slide up further, or go down a bit further with the bison & blade the pull the piston up over the blade. Piston will taper & get looser further up the skirt but you'll only feel the bottom third of the skirt--which is what you want, as you're doing--but just a bit more please. Blade looks way more than 5 thou or is it just the light shining across the top edge of it making it look that way. Looks more 0.5mm or are you just demonstrating what you did. I'll stop waffling on sorry.

Looks like a stepped "go-no go" feeler gauge  0.005" - 0.007"

Not sure what the goal is here but with all the issues so far I'd send it off or take it to a reputable machinist that KNOWS the old old two strokes..  too many well-meaning shops don't.

Or slap it back together and she'll probably run fine...  if rattling bad you might break a skirt though and then have bigger issues. 

It is a 0.005 inch gauge, go-no-go-type. Just tried to push it in further and it goes but it jams the piston tight in bore so maybe closer to 0.004 inch? So sounds like it cannot be cleaned up with a hone. Any recommendations for who i can send the cylinder to be fitted for a new piston?

thanks for all the input.

Bill Bune has been recommended for years by many prominent members here. 

Found this after a quick search. Is this the place to get my cylinder bored for a new piston?
www.billbune.com/


Many thanks.

Yes, that's the place. I've used his service for crankshaft rebuilds and cylinder work on vintage Enduros with great success. Len

OK cool. Doesn't seem terribly expensive either. Gonna give them a call and see about sending them my crank too. To be continued..

Thanks again for all the replies.