It looks like something got caught in there, the grooves look pretty deep for just a siezeure. To me it looks like whatever did that caused the ring lands to lock the rings up against the piston resulting in blowby. It that point it's a lit fuse.
The cyl grooving looks pretty deep, I don't think you'll get away with relining the cyl. I've heard they can can do a weld repair of some types of damage prior to recoating it.