I honed some cylinders at home one time. It seemed to work but it was a messy job. I did not remove the valves. See posts #40 and 41 here
http://forum.canardaviation.com/showthread.php?t=4923&highlight=hone+cylinders&page=3
I'm certainly no expert but in the past my cylinders always had a very distinctive cross-hatch pattern - that I don't see in yours.
A cylinder shop can do the job too!
Keith Rhea
RV7
I have a Sunnen AN portable hone that I use for fixing ring step wear and roundness and use a variety of stones. For just cleaning up a cylinder I use a Brush Research aluminum oxide 320 grit ball hone. I have a plastic disk I place at the bottom of the cylinder which keeps the tip of the hone from scratching the head. I use lard (yes vegetable shortening) which is water soluble and not as messy so I can wash the cylinder in a sink after honing. I use a bore brush for washing.
I can not see your photos.
Thanks.
Compression is not bad 76/80, oil consumption is 10 hrs/qt, but the oil gets black pretty fast and I can hear a hiss out of the oil filler when this cylinder is under compression.
Maybe let sleeping dogs lie.
Black oil might be from running too rich
what borescope are you using? My guess is the camera is making it look way worse than it actually is. It appears to be magnified quite a bit.