Well now that you have the cylinder off, I'd give it a thorough clean. Rusting seems odd-unless its a marine one and has been dunked....old castor residue looks a lot like rust to the uninitiated. checking on two of my display Hunters, that I know with absolute certainty are at their last running settings-the contra piston edges-that is the top of the portion in contact with the inner cylinder walls-are flush with the top of the cylinder.-so if the contra piston is further down inside the cylinder bore in your example you will need to knock it back to this approximate position. Try heat as before=just the cylinder-and then place upside down on a hard surface-a wooden cutting board or the anvil portion of a vice-and do the tapping with a hammer. I'd use something solid-like round bar, rather than tubing to drift with the hammer....and a reasonably close fit in the cylinder-say 15mm diameter...at a pinch even a piece of wooden dowel 3 or 4 inches long.
If no joy using this approach then it looks like an extended soak with a penetrating oil will be required..... See the sketch below-the contra piston cross section is shown in red-in the running position it occupies in the two examples of my own that I checked. If you can get yours to this position then you should be in the correct ball park for successful running..
ChrisM