Why did you tear it down? Was there a problem? You say the pistons have .005" clearance. Is that enough for those? If the piston mfg says they need more that would be good. I'm under the impression that money matters to you. If that's the case, I would find a guy with a Sunnen CK-10 (or equal) and some 220 stones, give it 20 strokes (more if you need more piston cleanance) and then 6 strokes with 400 grit for plateau. This won't get the corrosion out but it won't matter as much as you think. The present hone job is a hack. If you are on an unlimited budget I would make different recommendations.
In this situation on my CK I would use the soft 220 grit 512 stones with very light pressure and check for roundness and taper very frequently as the taper can get out of hand fast if it's not already and then the 400 818/820 as you said. With a lot of TLC it'll still be a thou bigger than it is now and you may not get all of the deep hack job out of there but it'll be much better than now.
