salvageable Engine?

My bro has a 70cc chengine bike. The other day he said that he was riding it and had a throttle cable issue, so he fixed it and adjusted the clutch because it was a little sloppy too. He said when he went to pedal start it, it would try to turn over. I told him to take the clutch cover off, and the cover for the crank sprocket and try to turn it manually with a scewdriver, you know, like what we do to put a new chain on. He said it wasn't moving. That told me the engine was locked up. He went on and ordered a new one from DAX, and went on an took the engine apart. He sprayed some WD-40 in the cylinder and got the piston to loosen up. After that, he took the cylinder off, and here's a pic:



Between the amount of carbon on the piston and the discoloration on the head, I'm assuming that it overheated due to insufficient oil. Would this be correct? If so, do any of you guys think the engine is salvagable?

well, I was mostly curious. The color of the fins on the head was gold. I told him to check the cylinder walls, and he said that it was okay. I don't plan to use the engine on my current proj. I figured that if he could get it cleaned and the rings checked out, then he's got a spare engine for parts or as a back up. I'm sure I had him running it without enough oil. What can be used to clean the carbon off? I know you can't use something very abrasive because you run the risk of scratching the piston and so on.