Chances are the head is fucked. Usually with little Jappas like this the heads go soft after overheating and they go wobbly too. But worth having it checked if you really want to play with the motor (nothing wrong with that idea

spanner time is good)
You'll want to hone the bores and re-ring it. So you'll need a set of micrometers, feeler gauges and a decent vernier caliper. (probably cheaper to borrow), I hope it's a poor photo because that bore looks glazed and I cannot see any cross hatching at all
I'd pop the barrels off it and have a good look on the thrust side of the pistons for signs of seizing (nice tasty marking) which I imagine it has done. If it has, pistons are toast unless you want a hand grenade motor. Checking the bore size all the way down is nice and easy, just calculate it with the ring gap
You can buy forged pistons for these with a number of different compression and squish arrangements
Also if it has been seizing, there is a very, very high chance that it has damaged the mains and big ends, they're not huge fans of suddenly stopping.
The rods will have to be very carefully inspected too as they're very petite around the small ends and seizing never helps
And after going that far, I would be investing in some beer to pay a decent mechanic mate to split the cases, because you'll learn a lot if you do.
And that's just the beginning

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