New builder looking for some pointers

Hello everybody, I’m currently taking apart my 2006 250ex engine that was smoking like a freight train and I was wondering if I could get a few pointers.

I took apart the top end and discovered a gap between the cylinder wall and piston. The piston was also scared and burned up slighly but the cylinder must of had so much lubrication from the oil that it really doesn’t have any scratches or marks along the walls.

So the first question is- What could have caused this? I’m not sure how to judge if rings are bad but is that the problem? the piston has some spots, particularly underneath it that look like it got really hot. is that a result of the rings going bad?

Next question – do I need to bore out the cylinder or can I get away with just honing it and getting a stock sized piston? Do I need to get a oversized piston and take it to a machine shop? I can buy the honing tool but if I need to bore it out as well then I will just take it to be done.

Thanks in advance everyone and take it easy on the dumb kid