le fou
Basically you did everything just about right by adding castor etc but you might have been caught out by the 2 1/2 turns suggested in the manual. That's just a guide and won't necessarily be correct, especially for the running in. Also, don't pay overdue attention to temperatures because if the mixture is set correctly then the temps will be what they will be. That said, I generally check head temps just for interest's sake and around 200F is fairly normal at the start of running in.

Running in should be done at full throttle and the first run should be with the mixture set rich enough to get a bit of 4 stroking for a minute or so then leaned just into a clean but rich 2 stroke. The revs will be much lower (probably ~1500-2000) than the ~500 from peak that Dar suggested because that's basically what you'd set the engine at after it's run in and you're going flying. For a first start I set the mixture where I can be fairly certain it's quite rich then lean out to the setting I want rather than have it scream its little heart out before richening it.

With all that said, I agree with Dar that most likely you haven't ruined your piston/liner unless it's scored or other visible damage. You mentioned it's still got some pinch without the plug and that's fine. Use the engine as it is and keep the new piston/liner set for when it eventually wears out.