I saw second oversize pistons 86.50 mm on eBay (Germany) - for only 50 Euro (all the six pistons). It was maybe seven-eight months ago.
As for the third suggestion - I'm sure - it works fine (I have such engine) - without any sign of overheating. I use the original old e28 pistons with new rings and after the first 800 km - fully synthetic oil. And for sure - the cooling of such block (you can say, with double thin walls) is better, then only one thin wall (for example 4.5 mm), but a very little worse, compare to the stock.
Of course I can't see how badly is worn the cylinder on the picture, even at 16 megapixel

, but if you can feel the edge with fingers - it is not so good.
The best way is measurement. My case was much worse - I had no edge on the top of the walls, but I had very serious vertical grooves, caused by a very-very poor job (sharp edges on some rings after gap adjustment) of a "professional". Very unpleasant case
