The picture of the bad piston looks like some of the pistons I found in really old engines.
I imagine that the rings may of been the wrong size. Perhaps they were oversize. The oversize rings installed on an aftermarket piston, stuffed into the cylinder caused extreme wear. Once the wear opened up the bore you lost compression in that side.
Another consideration is assembling the pistons and wrist pins without assembly lube. Assembly lube is key to providing a barrier between metal surfaces until the circulating oil reaches the moving part. That side of the cylinder began to bore itself out being dry the first thousand rpms setting the stage for extreme wear.
The SK pistons are not that bad. I have been "burnt" on aftermarket rings though.
Be careful with snug piston wrist pins. I again suggest using assembly lube when reinstalling wrist pins and new rings.
At this point I would bore the cylinders to match the oversize pistons.
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