The chip doesn't concern me that much, but there looks like there is corrosion at the top ring. I would clean up the groove and see if it is within specs. Also make sure the piston is still round at the bottom. We used to knurl them, but its hardly worth it. Also check your bore. I use a dial indicator, but a simple way is to remove a ring and then reinstall the piston and lay the ring on top of the pistonand measure the ring gap variations as it moves up and down. If you are satisfied with everything and just decide to only rering it, break the glaze and cross hatch it, and wash it with warm soapy water. Use only cast iron rings. Any other rings will never seat unless the bore is almost perfect.
