The darkened circle as seen in the previous post feels smooth to the touch for about 3/4 of the cylinder, but on the top 1/4 I can feel a noticable ridge. I suspect this is where the piston was sticking, and probably where the split of the ring was. It doesn't feel very deep, but I'm sure my fingers are not calibrated for tenths of mm or thousandths of inches

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I will proceed as you suggested to measure the ring end gap in and out of the notched area with a feeler gage.
By the way, it is an 88mm piston/ring in this tranny, so it does sound like I might be able to bore/hone it out to fit the larger piston from the later transmission if need be
Since I will have to be removing this tranny from the car

I am also looking into a '82 240D with a blown engine ($200) that I might be able to scavange a tranny from. From what I can tell so far it should be a drop in solution.
I'll post the on-going results and pictures when needed of this continuing saga...