ORIGINAL: Tired Old Man
That's a more common issue than many know.
Question: How did you check the ring end gap? That's a smidge important. I'm presuming you removed it from the piston, inserted it into the cylinder in the correct orientation, and assured it was square with the combustion dome?
Exactly, if you don't put the ring in the cylinder in the same orientation as it has been run you will not get a correct reading. I really find it hard to believe that it has .002" end gap if it has been run for two years on 100:1 of any kind of oil.
I two would like to see the cylinder better, you can't see the condition of the wall at all in the pictures. This has already been mentioned but your description of "three shiny verticle lines about 3/8" wide" could indicate a cylinder that is not exactly round, if so, and this engine had low compresion when new and did not improveafter a couple tanks of fuel, it should have been returned at that time.