Pitting in the cyclenders is damage from corrosion, usualy from moisture accumilation on an engine that hasn't run in ages. Sometimes it's a little surface rust and can be cleaned up with a ball hone, other times requires boring the jug. Unfortunately, unless you have a mini-borescop & can look into each jug through the sparkplug hole, you have to remove the top end to inspect for it. In the case of my engine, when you match the damage in the jugs to the damage in the valve seats you can see what valves were open allowing moisture to collect in the engine (& also the reason I remove the rocker arm assembly on any engine I store, keeps the holes closed!). Typical issue in wet climates on vehicles that get parked for months/years at a time. And the issues it causes are exactly what you stated, Depending on how extensive it is it will cause heavy blow-by and compression loss, fuel in the oil, ring wear &/or breakage. However, oddly enough the one jug I have with the worst blow by issues was the one that had the least wear on the rod bearings & pin. Simple cause is it't hitting hard when, or if, it fires.
I dig all cars, old and new, whether they were hammered out of American iron, German steel, or Japanese tin cans. Being unable to appreciate them all is missing out on a world of great things. But thats just MY opinion! :P
