Sorry to see/hear that I was right regarding it getting rusted during inadequate storage??
That is a bit more than FLASH rusting, but I've read about members who had engines that were LOCKED/RUSTED, got them loosened up with MMO or such, did original comp. tests and they were LOW, but ran the engines several hundred miles and allowed the rings to both scrub and reseat, and the comp levels came back up to very close to stock values. However, they did NOT take the head/engines apart. You're alot further along than that. Perhaps you could rent/borrow a cylinder caliper/gauge from a local auto store and perform the wear measurements along several positions and vertical points where the rust was, as well as a fellow undamaged cylinder and see how they compare, and if it's still within specs!?
The other thing I would be worried about would be the rings being rusted/corroded to the piston so that they would not apply the proper outward pressure to reseat. I think since you already have the head off would be to the jugs off, and remove/clean/derust the rings and then reinstall, again provided the damaged cylinder is still within specs. I'll defer to the real mechanics regarding whether you would want to try to do a very slight/gentle honing, or just put the jugs back on, button it up and run it!?
Good luck!
T.C.





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