Does look like an lean mixture from over heating at high speeds..Like others said remove head an see what its looks like bend value or seized piston to pin or piston to cylinder wall...Keep us updated

 

Well finally dug in and the motor is a mess. Blown piston, jug is toast and metal dropped down into the lower section of the motor.

Soooooo need to find a new motor. Any recommendation on where to find a re-manufactured motor? Something with a warranty

Not really sure what happened here and why this happened

 

Take the motor apart, remove all broken bits of piston. Re-bore the cylinder to oversize and get a new oversize piston and rings. I've done this several times on Hondas. If the cylinder won't re-bore, get a new one or, if someone makes them for the 350, a liner.