That cylinder is nice looking. It is such a shame to see this happen. I'd bet, you and your shops heard the tick. Thinking exhaust manifold leak/crack.
I beat this drum day in a day out. There is no reason for this. The sign are loud and clear. Not trying to make you feel bad. But a lesson for those that hear the tick. Check your spark if tick heard on cold start. Do not drive until, if tick heard after warm up.
TICK TICK TICK POP POP POP is a ticking time bomb, often mistaken as exhaust manifold crack or gasket leak leak. ALERT, ALERT, ALERT: Spark plugs are working themselves loose. "Walking Out" Then blowing out of head, taking their female threads of head with them! Very damaging! You think TICK...
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Sorry for that!
Hope this is helpful to OP.
You have about as good looking cylinder as one could hope for. I wish all I scoped looked pictures you posted.
It looks like threads are damage, unless picture poor/blur. You likely have other picture to confirm bad. I'd still run in a thread chase and see if a new spark plug will torque to 18ft-lbf. It's worth a shot.
For sure metal bounced around in cylinder. Clues of hit marks on piston and head are clear
Question, is there metal fragment between cylinder and piston on top ring. This line looks fresh, and is not a good sign:
60% chance metal still in there.
So what's best, course of action: Option 1, 2 or 3!
1) Cheapest, fast and will work: Time-sert with heads on.
90% you'll get metal in cylinder, doing this way. If some metal already (still) there, it will not matter much you add to. Compression is likely going to if not already be compromised anyway. But this will likely only result in, uneven idle and may be ~2% MPG loss. I doubt you'll notice. Worst case you replace a CAT and engine (or rebuild) at later date. CAT because bad compression, could foul one if allowed to run to may miles with a shot cylinder.
2) Remove only damaged head, repair threads. Best if head bolt replace too, helps keep compression even BK1 vs BK2. But still 60% chance some compression loss, due to metal still in cylinder.
3) Both heads pulled and machined or new, is a great option. But I'd not recommend, until at least 20K miles after head with blown plug repaired. If that cylinder is compromised. Than no need to throw extra cash at this engine now.
A trick you could try:
Move piston down. Inspect wall for metal, remove any.
Move piston up than back down. Inspect wall for metal, remove any.
Move piston up, and oil to cylinder. Move piston down. Inspect wall for metal, remove any.
Move piston up than back down. Inspect wall for metal, remove any.
If I got any metal out, before any repair. I would be inclined to roll the dice, pulling the one head to repair it..