The machine shop foreman came in today and measured pistons and bore, but did not share his findings. As we listened to his 1st explanation "We idled the engine too long and glazed the cilinder" I stopped the conversation, busted out a phone and said lets start over "I am recording this"

The tones changed, mine went up and theirs went down as the absolute BS was getting DEEP. Again keeping with that we must have idle the engine too long. (The engine was heat cycled a few times and then strapped to the (Loaded) dyno for varied low RPM, high load ring seating.) The idea of litigation was thrown around and then the owner of the car stepped in and struck a deal. While they will not verbally admit fault, they are building us a shortblock with a warranty at their expense Motor is on it's way there now.

Thank you all for your input and insight. At the end I believe the engine was just ever so slightly under-bored, but we will never know for sure.