ORIGINAL: pe reivers
Do not use diamond grit on a cast iron piston though. It is hardly impossible to get the grit out of the iron pores later.
Use Autosol chrome polishing paste as lapping paste. After the piston and sleeve are lapped togheter, wash the parts free for lapping paste in petrol or kerosene.
To test the fit are correct: The piston will go tight into the sleeve when the parts are without oil and with oil the piston will go easy into the sleeve.
The sleeve must be tapered then the piston will go tight in near TDC, it will keep compression while the engine are cold and make engine starting easier. Under working temperature, the sleeve will be parallel.