woow there is very little room for the cylinder walls..
1250 seems like a great price .. for a whole motor..
i would say my opinion on why the damage is the way it is but .. i'll keep it to myself
when you DO build the motor.. get the block honed.. just to be safe .. the sounds that cylinder 2 made when you were pushing it down were disturbing.. and were probably scoring the block even slightly.. which means more then likely the ringlands wont seal correctly when you put new pistons in