In your case, the piston has most likely melted around the exhaust port area due to excessive heat. 2 strokes don't like to be held at one rpm for any period of time, whether it's at 4000rpm or 12,000rpm. This means that the exhaust side of the cylinder doesn't get any chance to cool down. When you back off on the throttle, the unburned air/fuel mixture cools the piston and exhaust ports/cylinder very quickly as it passes over and through them.
When you have the top end off..
-check the condition of the powervalve (make sure it all functions correctly when moved by hand)
-check the conrod big end bearings (make sure they have no up and down movement)
-make sure that the cylinder plating isn't worn (if you can catch your fingernail on the plating it needs to be replated or sleeved)-If your seizure was due to the piston failing, you'll most likely need to do one of these things
-Make sure no debris is in the crank case
-Check the condition of the reeds (sitting flush with cage, not chipped or cracked/warped etc)
-Make sure the intake side of things is 100% clean before re-assembly (filter, airbox, intake boot etc)
As for KX Gaskets, I think you can use the thinner head and base gaskets from a 89 model (Not 100% sure) You'll be able to find more info on that if you do a search.
Most people I know have opted for a forged piston, either wiseco or wossner. I've always used wiseco pistons, just because they're forged and have quite a good reputation. Forged pistons are less likely to shatter than cast pistons, and according to popular belief, last longer. Although are slightly more expensive. Vertex pistons are the major aftermarket brand for cast pistons, and also have a good reputation.
In the end it's up to you. Chances are, with a fresh top end it'll feel like a whole different bike.
Good luck.