RE: Piston Damage
Bad Tooth,
Don't use grit.
I would suggest chucking the head in a lathe and turning it down to reconstruct the combustion chamber to close to its previous shape.
Make sure it rotates concentrically with the sleeve sealing surface.
Do not grind the area of the glow-plug thread, or you would lose about one complete thread, before all the pitting disappears...
It may be best to to make the chamber annulus shaped (instead of 'hemispheric'), with the center protruding into the chamber slightly.
MVVS use this shape and their engines put out great power.
I think you will only need to grind down ~0.2-0.3 mm to get the head and the squish-band smooth.
Grind down the sleeve sealing surface down the same amount as you do the squish-band, to retain squish clearance.