It is probably piston smeared on the cylinder. Get a brake hone (a used one is better than one with new stones) and carefully remove the metal. You may be able to save the piston if you use a jewelers file to clean the ring land and 320 wet/dry sandpaper on the skirt. Get a new ring from DPM, Morris, or Frank Bowman.
Use some castor or make sure it can never go lean, which is impossible. You can loose tank pressure, the fuel line can get a pin hole in it while you fly, etc.[>:]
A fuel with 18% oil with 20% of that castor would have saved your engine, if that smear is piston. When the CP oil boils off it is metal to metal. When castor gets too hot it will polymerize and coat the surfaces and the parts will still stay separate.
