Wow...turn that around and send it RIGHT BACK. No way should you be paying for something that is pitted that bad. You're going to get blow by and if it gets any worse (which it will) you'll lose compression in that hole. The only thing you can do at that point is get oversized pistons and punch it out even further, and at 84mm I don't know how much farther you can go before you have problems. Not a fun place to start when you're putting a motor together.
If it's a board sponsor I'm sure they'll have no problem making things right. Good luck. And remember, it could be worse, it could look like mine. Heh