I don't think a borescope is needed since the head is on the workbench, heh heh.
Anyways, trust me on this.....there is no such thing as a dealer (or any real mechanic) willing to put pistons in a damaged bore.....that is a guaranteed comeback.
For whatever it is worth, the genII aluminum block has steel sleeves cast in place. These are so hard they can take a real beating and not be harmed......much more tolerant than the genI cast iron block.
Terry B........I AM retired and fully intend to continue replacing cars.......I hope you are not one of those 'This is gonna be my last car' types.
When I pull out of a dealer with a new ride (two years on average) I'm so excited I can't wait for the next one!
Anyways, IMO, don't frett....let them do their thing and report back.....they aren't re-inventing the wheel or anything. To you, sounds major, to me, (semi retired wrench) it's just another repair.
Rob