The cylinder looks good but I highly recommend lapping the head gasket surface of the cylinder, replacing the head gasket and lapping the gasket surface of the new cylinder head before you replace it.
To make parts sourcing easier, when you order a new head, get a new cylinder base gasket and head gasket along with it.
10 or 15 bucks for a cylinder head is much better than tearing the engine down for seal or case gasket replacement. Whew!!! I never saw that coming. Good luck to ya! Oh by the way thank your lucky "stars".