Thanks for everyone's reply.
I bought the bike for $2k, figured even if I parted the bike in parts it should still be worth that much.
The swirl marks are all the way around the cylinder, they do look horrible. But the cylinder feels very smooth when I ran my finger on them. The
PO assured me that he didn't do anything like that, but I guess since he bought it used there is no way to tell for sure either.
The dealer checked the VIN and found no outstanding recall on this bike. So I assume everything that needed to be done was done on it.
I did try to start it and it wouldn't, then decided to take it apart. It didn't take long as everything looked easy to get to. I usualy would have done some diagnotic before I tear things apart when I work on cars, as they take a little more time to take apart. But figured, man this is a bike... and figured since an "authorized" dealer said it needs a top end...so..... LOL!
If it is indeed a bore issue, shouldn't the leak down reveal that? Instead of coming out of the intake?
Currently the motor is still in the bike I left the cylinder in. At this point should I remove it from the engine? I did see a lot of little debris stuck on the top of the piston ring area. Here are some pics.
For some reason I am limited to post pic at 150x150 size. So here is the links to the pictures of the debris I was referring to
http://p-car.com/temp/motorcycle/DSC05545.JPG
http://p-car.com/temp/motorcycle/DSC05546.JPG
http://p-car.com/temp/motorcycle/DSC05547.JPG
http://p-car.com/temp/motorcycle/DSC05548.JPG