Small Engines (Lawn Mowers, etc.): Tecumseh M60H piston skirt, piston skirt, combustion chamber

Question
Tom,

I took your advice with the Tecumseh M60-75296H that had a 65 psi
compression.  When I squirted oil into the combustion chamber the pressure
went up to 105 psi.  That should indicate bad rings.
I tore down the engine and the cylinder is measuring 2.6250 - 2.6270 which
doesn't seem too worn to me.  The piston skirt (90 degrees from the pin) is
measuring 2.6175, that is below the min of 2.6210 that I found in a book.
I have two questions:
1) Should I use .010 oversize rings in anticipation that the cylinder will open
a little with the honing and to ensure that I don't repeat the same
compression problems as before?
2) What would be the side effects of re-using a piston with an undersize
skirt?  The piston skirt gap would be .0095 rather than a max of .005 that my
book also cites.
Thanks,
Brad  

Answer
If it was me, I'd go new on the piston, and the .010 over, making sure I honed the cylinder to the right specs to insure being able to compress the rings enough for reinstall. It's just a job worth doing right. I have seen a ton of rebuilt engines, and It always boils down to someone can't wait to tell you its a rebuilt engine, But one must always remember a rebuilt engine is ONLY as good as the man that rebuilt it. The right man takes his time, skips no corners, and ends up with a good rebuild.           Tom