Sanding will take off the high spots, but it will also take off some areas you don't want removed. When you sand, you will give a perfectly round rod flat spots.
Instead of sanding, use a fine file. Just take off the high parts and ignore the lowspots. Take your time and keep the file flat to the surface of the cylinder rod. There will be some pits, or depressions from the damage that will remain. Leave them alone. Short of welding and machining, they are just something you'll come to live with.
The seals on your gland that the cylinder rod slides through are wide enough that there shouldn't be any leakage. The only time you could possible have leakage is when the pitted area passes throught the seals inside your gland. If it did leak, it would only be a drop or two.
Sanding away too much will cause you much more problems than leaving the pits in the cylinder. The unround shape will cause wear on your seals and lead to them wearing out sooner than they should.
Eddie