Looks like a broken piston ring to me too. You'll need to yank the heads to have a look. More than likely just pulling the heads off will reveal if it is in fact a broken ring because there will at least be scratches in the cylinder wall of the broken ring. If it is a broken ring with a piece that large more than likely it did some major damage to the wall and/or piston. But it is impossible to say how much over bore (.020, .030, 040) will be required until an inspection is done. If you haven't seen a piston ring before that means you haven't rebuilt an engine so if you plan on doing it yourself I would suggest getting a good manual. Their worth every penny they cost you. LOL