That type of damage is a classic symptom of detonation due to a lean mixture. I'll bet there was a vacuum leak to the #1 cylinder at one time, resulting in a lean mixture to that one hole. The cylinder runs hot, the piston material softens, and the sledgehammer action of the fuel mixture detonating while the piston is going up knocks a piece of the piston crown away.
Check the cylinders for taper wear and if there's more than .005" or so of taper in the top 1 1/2 inches of ring travel, do a rebore and install new pistons.
Jerry
