99 xr100 blue smoke and running rough

[duck3241]

I rebuilt the top end and replaced the exhaust valve on my xr100 because it would not run or start at all. the exaust valve was not seating properly because i cut the baffling out of the pipe when i was younger ( and not to knowledgeable) when i got done with the repair it ran good for a little while and then it just started burning oil and running like crap. when i was rebuilding it i let the motor sit for a couple months out in the open and it built up a little rust on the cylinder walls so i did my best to clean it up and then i put it back together. im thinking the reason it is running rough now is because the rust ruined the piston ring and now oil is seeping in. does that sound right and can i fix the cylinder wall?