James,
I would be doing the following now you have taken the cylinder off.
Go to the parts list and repair manuals and open up the forum for Victa motor manual (you will need password which I will PM you) and click on Victa early model 125cc & 160cc Motors. You will be able to print off and do your repair.
Note:I would recommend that you replace all bearing and seal, cylinder & piston to do a full reco.
Once you have done it you will have a machine that will start on the first pull every time and outlast the motors that they are`producing these days.