Bike is a '91 200 that I purchased earlier this summer. Pulled it apart today for a new piston and rings since it has poor compression (90psi) and look what I found. . .

Pretty sure my cylinder isn't supposed to look like that.. . . Previous owner told me he "did rings" last year. The piston actually doesn't look bad with no damage. Bike always started first or second kick but had no top end and I couldn't seem to get it jetted right.
What would have caused the failure? Seized piston and the previous owner just threw a new one in and ran it?
Any other rcommendations besides ebay for a new jug? Who do I send the new one for coating?
Sorry, couldn't figure out how to imbed the pictures. . .
Thanks,
Lance