I started caddying at a private golf club in 1980. They had several of these, but, only 1 guy would work on them. They worked GREAT along creek side and diteches.
Hand Tool Rescue restored one of these a while back, and its piston has the same exact hole as yours, so there's nothing to worry about there. I think once you get those new reeds it'll be flying along no problem.
Yep drawing too much air with the broken reeds. also when the piston comes down it's blowing your fuel charge back out of the engine/carb because there is nothing to hold it in. I think the reed plates are readily available on Ebay if nobody comes thru with a parts engine looks a lot like a TEC 470102a reed plate
Just A Couple Of Things.. First Of All ,You Should Have Tried The Rings In The Cylinder For Ring Gap. Secondly The Rings Have To Be 180 Degrees Opposite Each Other And The Open End Of The Rings Have To Be No Where Near The Ports, Otherwise The Rings May Catch The Port & Break The Rings & Destroy The Barrell . Thirdly The Hole In The Piston Was Probably Made By Someone Putting The Wrong Length Spark Plug In It & It Was Hitting The Piston. I Would Have Put New Rings In It Regardless While You Had The Barrell Off Because Those Rings May Well Be Worn & It Won't Have Great Compression. If That Is The Case You Will Have To Pull It All Apart Again..
Considering there's extra material on the other side of the piston where that hole is, that's from factory. Also, Hand Tool Rescue restored one of these, and it also has the same hole. Compression is fine, as you can hear it try to take off. Again, sounds exactly like HTR's Flymo which was in considerably better condition. Ring gap alignment isn't entirely critical as long as they're not lined up.
The ring gaps area staggered and not by any exhaust or intake ports. I believe the compression is OK because it does want to run. I just need to get some new reeds and I think I’ll be OK. Thanks for all your information and for watching 👍🏻