ole-George nailed it all.
If the bore is .010" over on a standard piston then your measured ring gap will be more like .050". I'd also guess someone got overzealous with the hone AFTER ordering the standard piston. I'd suggest buying a .010" over piston/ring set then carefully and properly hone the bore to fit. You might have to take it to an engine shop for that.
Resizing con rods that way was a pretty common practice at one time and if done properly was a good fix. Labour used to be cheaper than parts. I've done it myself after a crank polish to gain back a few thou.
Probably by the time you mill the head and block, you'll gain back most of the con rod length. Your stroke is still the same. Besides, what you gain in a having a proper piston fit should keep you happy enough with the performance.
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