Put it in a crockpot and clean it so you can tell for sure what it really looks like. Do a search for one of several threads on crockpot cleaning methods.
It appears that most of the black "gunk" is castor residue. If that's case you should be able to get it running just fine. This why you should always use castorblend fuel, it helps prevent damage when you overheat a motor. A new piston & sleeve at most, or if it is a ringed motor, maybe just a ring & sleeve. Maybe just a good cleaning will do the job.