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1985 yz125 top end rebuild

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I just got a 85 yz125 from my brother inlaw and I need to rebuild the top end. it was not siezed and has some compression. Right now it is 2mm over size so the power valve is modified because it isnt damaged. The piston ring melted into the piston on the exhaust port side and it looks like the sleeve has started to maybe seperate from the block in the bottom of the exaust port. There is also what looks to be some small cracks in the thin part of the power valve ports right behind the sleeve. Do I need to get the cracks welded or is there something else I can use for them. Also the cylinder doesn't have any scrapes in it it still smooth. Can I get it honed, get a new top end kit and be good to go? Or do I need to get a new sleeve and get the cracks welded? If I get it sleeved to the stock size can I still use my modified power valve or will that be a problem. IMAG1320.jpg   

     crack in th power valve port.   

IMAG1415.jpg

Cylinder seperating? To me it looks more like the casting is flawed. Is it ok?

IMAG1433.jpg

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