Your 036 has an impulse line so you don't need to make the sparkplug adapter to pressure test it.
Ports can be blocked with inner tube rubber behind carb/muffler. Most tyre shops will give old tubes away if you ask.
Cylinder will likely clean up & a scotch pad on a mandrel will do fine to take the glaze off so rings seat.
If the damage pictured is the worst of it then I'd say you will get away with cleaning up the piston too (don't need to "remove" the damage, just take off any high spots).
New Caber rings as you mentioned & clean all that carbon up. Be carefull if using oven cleaner as it can damage aluminium.
I would start by measuring squish... you may find you can do a base gasket delete & gain a reasonable amount of compression there with very little effort. As Thompsoncustom said, lowering the ports by a fraction will likely do more good than harm too. Finish up with a muffler mod & I'm sure it will put a smile on your face when you run it.
Worst case scenario there are used or NOS cylinder kits floating around... I'd put one of Mad Professors 034 kits on it or see if Singinwoodwacker will send you a cylinder to clean up before putting a cheap cylinder on it or replacing it with a clone.
If it does need a piston preference always goes to OEM, then Meteor, then the aftermarket lottery. I'd only seriously consider a popup if squish was huge.
If you don't do a pressure/vac test before pulling it down it is still a must after assembly IMHO. If you get a cheap tester try & get one that does vac too (& do vac test first)
JD, Many readers in here may understand how to measure squish, but maybe the OP doesn't.
If I understand the process right, one step of it is to use a length of solder as one rotates the piston to the top.
Another factor of the improved performance process is the impact of judiciously milling out inside the potentially damaged, or a new OEM cylinder. These mods plus opening up the muffler, and altering the squish could definitely improve the performance of the saw, assuming that the electronics, carb etc are all up to snuff. I have never ported any saws but have seen the process and understand the principals. I also know the warnings of knowing where the limits are as far as how far and where one can open the ports.
***** Considering fields_mj's feelings on spending on extra tools and supplies and all his other equipment, home, family needs, I would ask, " is the 036 really the saw I would sink dollars into? Is altering squish, porting etc, worth it, given his tool storage, budgeting his $$$, truck repairs needed, etc? Yes, I know that a gasket delete is a minimal cost alteration, but how much will his saw improve if he just does this partial mod vs. the total package? Where is the cost/benefit threshold of doing porting, gasket delete, muffler mods to this model saw?
Does anyone else agree with me that he should probably start with getting his saw either diagnosed, deem the seals, crank, piston and cylinder to have minimal damage to where he can get the saw running essentially stock by possibly polishing things up and putting new rings in it will render his saw to be within spec. If all works out doing the minimum and if he puts it back together and fires it up, he can have the " acid test" of was that all it needed, and he is good to go? My thoughts are, if he is able to get it running in essentially "stock" form, he at least has his reliable saw back. Once he does, then he is always free to mod it as his time and budget permits?
For reference, the OP lists his saws below.
Suzie Q - Stihl 024 - 18" .325 x .063 mini spline 7 pin rim.
Mini - Stihl 026 - 18" .325 x .063 small spline 8 pin rim.
Taz 1 and Taz 2- Stihl 036 - 18" .325 x .063 standard spline 9 pin rim
Bertha - Stihl 064 - 28" .404 full comp, 42" 3/8" full skip.
The Pretender - G660 - 28" .404 full comp, 42" 3/8" full skip