Regrettable Engine strip down !!!! I think " Follow up". But it's not over.

Quote" Ok Kawboy, see where you are coming from . This maybe the instrument used, the new caliper is 100% I've tested it with gauge plates. But it could be the internal bore gauge. This is the T type with the spring loaded arm, that you lock at the specific diameter then measure out of the bore. ?" 

I think I know why the numbers are "Goofy" It's a technique issue when using the manual bore gauges. I know it would seem natural to insert the bore gauge into the cylinder and then lock it up, remove it and measure, but that's  not how to use them. you need to lock them lightly at a diameter slightly larger than the bore to be measured , then roll the bore gauge through the cylinder which causes the bore gauge to collapse down to the bore being measured. The bore gauge will find the largest diameter and hold that position until you measure with an outside micrometer or if all you have is a vernier. Typically, what I do is insert the spring loaded bore gauge into the cylinder and hold the handle at a slight angle to the centerline of the bore and lock the handle lightly. Then roll the handle up vertical and through the vertical, then remove and measure.

As for the rings- it sounds like you have a set of keystone profile rings in there. I'm not up on this particular style of ring, but AI suggest it's primarily used on diesel piston s to break up carbon deposits. How you ended up with these rings is beyond me. See pic??

 

Kawboy, this makes so much sense. The bore measuring tool probably my fault for incorrect use !  can't wait to use it in the correct manner.
OK down to the rings ? i suppose when you open up a engine that's not been owned from new, don't expect it to be as it should !!!
Top ring on #1 looks to be a mixture of internally stepped ring and the full keystone ring. looks so wrong in every way.  Just checked out #6 Top ring, looks more normal but ring end gaps failed miserably . Piston groove well within limit.