Long-awaited update.
Back in February I had a great conversation with someone from Total Seal, (I forget his name) and he basically told me the problem was with the hone, just like everyone else has.
On his recommendation I took the short block to Baldwin Racing Engines in Friedheim, MO. Almost a 4 hr drive for me. He put a profilometer on it, and it's simply way, way too rough. I'll post a pic of the reading below. It appears to have started correctly, but never had the finish hone needed to knock the peaks down. This is why the extreme skirt wear, brand-new-looking cylinder walls, and of course the blowby.
It's now been sitting at his shop about a month, where it's getting done right, as well as new gapless rings from Total Seal. He's giving me a pretty good price on the work needed, and ironically, when combined with the last shop's bill, adds up to what most places quoted me way back.
Anyway, it'll be awesome to have it back together soon. I'm swapping the turbo and CP3 for better stuff while it's open as well.