It is very expensive to loose an engine and I recommend sending in for repair.
If you do decide not to send it in, at the VERY least:
1. Closely inspect the cylinder for chips in
the chrome.
If there is a chip and it is below the ring area it may or may not last.
2. Replace the ring and check the groove for
tight or loose spots all the way around -
The ring groove can expand after running a bit letting the ring slop in the
groove.
3. Check for a scuffed piston (Sand paper will remove most or enough, just use precaution to keep shape and size correct. Other words don’t over do it. Dimples are fine while protrusions need to be removed)
4. Check for scrape marks on the flywheel.
The case bearings can go bad allowing to flywheel to rub. This can cause radio
interference and will wear seals causing leaks.
5. Check for slop in the crank pin and wrist
pin bearings.
The wrist pin bearing really should be replaced if not the whole crank assembly.
If these bearings get loose, it will destroy the engine.
6. Replace exhaust o-rings and double check
the seal.
If the o-rings are leaking, it will affect performance and if the line cools
something else after that section it will not get water and over heat that
section. On aluminum headers I use the orange silicone o-rings because the
other ones will leave grooves where the o-rings were.
7. Make sure the cooling cap o-rings are still
sealing.
If these are melted, most likely the engine will need a major overhaul.
8. Hook to garden hose and let idle for 15 minutes, then disassemble and check again. If all is good I would inspect again after a day of running just to be safe.
My theory is most modified engines have the pistons turned down. A turned down piston should run longer before it seizes and gives you more time to catch the problem. The down side is it would run longer allowing the heat to travel farther and possibly damaging more parts. Running 8+ oz of oil per gallon will help prevent damage also.
A $250 rebuild is cheaper than buying a new
$600 engine.