Not TOOO bad. Just need to have the machinist clean up the cylinder and head. They can hone it out to get the cylinder walls clean then measure it and give you their opinion. I can't tell the condition of the cylinder walls so I can't take a guess at if you need a 1 or 2 size over piston and ring set. This is easy stuff for any machinist that does engines. I would probably just "lap" the valves in with a hand spinner thing and some compound and put it all back together.
Just keep all the original parts as much as possible. I've fixed worse than what I see in your pictures. Shoot you could probably just hone out the cylinder yourself with a drill and ball hone - and then just re-use the piston with some new rings and be on your way. Just lap those valves in while you have it apart and make sure the guides and valve stems are operating smoothly. Put some synthetic grease on them while assembling and get that show on the road. :-)
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