I would definitely not reuse the #1 piston, it's scrap now. Looks to me that the engine overheated from low coolant. I would also be skeptical whether you can get most of the score marks out of the cylinder wall, which you must to do a good repair job. I'm willing to bet that once you do, you will need an oversized piston as the skirt to sleeve clearance will be way too much. I'm fairly certain this is what was causing your knock, and will cause a knock again with too much clearance.

The other pistons look reuseable, but again, you need to check the piston to sleeve skirt clearance to make sure they are not too loose. You can probably install an oversized piston in one cylinder only and reuse the rest to get by, but to do the job right would mean boring all the cylinders for oversized pistons (or resleeving for standards).

How far you should go depends on how good an engine you want in the end and your budget.

Recycled
 

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Lol it was good to get a notification that people find my pics useful!
You will want to see the second thread too:
http://www.peachparts.com/shopforum/diesel-discussion/277298-konstans-1982-300d-engine-out-thread-part-2-a.html

Hey konstan,
Its been a while.
How is the car going?
The threads of yours are great reading for anyone thinking of a major rebuild!