OP - piston skirt appear to have been scraping cyl wall pretty good - might want to check all other areas (crankshaft) thoroughly for damage/wear. Kohler website has free pdf serv d/l manuals for those engines..
: It looks to me, that the piston has a chunk out of the skirt. Check crank, cylinder and cam for size and damage. If it has grenade gears, throw them away. Also while you have it tore down replace the govr'n gear. When I do a K-series, I use OEM parts. All though I did a K-301 for a Buddy of mine and he insisted that I use the kit from E-Bay. So for so good. and he is not easy on equipment. :united-states: