Seems like quite a bit of scuff on the piston, all over the sides, above and below the rings. Not sure how much is just dirt and smudges.
Oil rings don't seem right to me, like maybe they're for a standard bore? Or they're oversize, for a 350cc? At best, they don't appear able to have much pressure against the cylinder wall. In the first pic, the bottom oil ring is on top of the spacer, but it has been disassembled and handled, they don't normally slip out of place like that though. The spacer should cover the ends of the rings and help hold them in place on the ring lands.
I wonder if the top rings are installed upside down. Rings normally have marks that get installed facing up, then the marks also tell which ring goes where. Or maybe the bore job wasn't done right?
Hard to judge the pic of the cylinder. I would get it measured and see what's up. it does have some scoring, and marks that look like it may have sat a long time ... Unless that's just the bottom of the stroke, but I don't think so.
Small chance that it could be honed and a new set of rings installed, but it needs measured with an inside micrometer..
The rings and ring lands do appear carbon-free, so they most likely weren't stuck, but the oil rings just don't look right.
Did the shop remove the head when they lapped the valves? The gaskets should still look new.