Cylinder hone or bore oversize?

While I just always go for fresh bores and pistons anymore, the numbers don't look all that awful.

From your description, it sounds like you measured out-of-roundness only. Did you measure bore taper from top to bottom? Excess bore taper will flex rings constantly as they move up and down and tend to wear them out quickly. If this includes taper, then overall it doesn't look to bad to me. (You can get this much distortion in the cylinders just torquing down the head bolts or even bell housing bolts.)

Also, you need to measure the ring side clearance in the piston ring grooves before you have a full picture of the existing parts. Loose ring side clearance will allow ring twisting which will result in poor ring sealing.

Okay, I will measure ring side clearance today too. I was going to go with new rings, but of course I'll have to measure with the old rings today. I am wondering if the engine crud is going to give me erroneous readings?