Combustion residue build up on top of the piston is burnt oil. Just check that the bore is OK then measure your ring gap, it has probably opened up allowing oil to be carried up past the rings. Take out all of your valves and get a shop to re-face them all, light lap with fine paste and blue the face back in to ensure that there is a seal all of the way around, only light amount of blue and slight turn to ensure that you are not wiping the blue all around the seat. Check the ring gap in the liner, if it is less than minimum you will have to see a mechanic and get him to gap them for you.
Now the tricky bit when you put the old girl back together, you have to run it in and if it is not done properly you will start burning oil again. I used a 30w Mineral Oil and when I started the bike, checked for leaks quickly, took it out on the road and ran it out to around 7,000rpm in second (depends how game you are with the police) held it there for a few seconds and then slowed down. Did this a couple of more times for the first 20-30Klm to bed in the new rings. Changed the oil back at around 200klm to the recommended product and mine has not used oil since the second rebuild, first one i @#$%^d it up and did not run it in properly. But like Mikeinva said a 904 kit is heaps of fun! and for the cost of doing a rebuild like above, if you cant do it yourself, then it may be cheaper to go the BBK.