When I started reading this topic i looked at the first few pictures, and thought "what a nice old engine with beautiful castings". Reading further I was shocked to see the disaster made of that cylinder casting. Were these engines offered as kits and maybe this one was started by a very incompetent person? Or was it an unfortunate attempt at repair?
Anyway, it will be very interesting to watch how you redo this cylinder. I also think a sleeve is the easiest option. You would also need to machine the port face and the intake and exhaust ports, but it looks like there is enough of the casting left to do that.