I use a flex (ball) hone 240 silicone carbide grit on steel bores to remove wall glaze when doing a ring replacement (or sometimes same rings) AND the cylinder measures well within spec for taper and out of round because the flex hone will follow the bore and will make things worse more or less.
If the cylinder is out of spec it usually requires machining like rebore, to true it up,etc. but then you are into oversized piston(s) and $$ go up.
If operated correctly in my experience the flex hone will remove less than 0.0002" (2 parts in 10,000), hardly an issue. I use outboard oil to hone and when done I clean with very hot soapy water replacing the hot water multiple times and vigorously scrub with a round brush that fills the bore until after wiping out there is no residue on the cloth. Then dry and quickly lube the cylinder with outboard oil because oxidation quickly sets in. To get the correct cross hatch pattern. I use a variable speed drill set around 400 rpm and stroke at up and down once per second and do about 25 strokes. But that varies with user, correct hatch pattern is what you are after and that is hone marks up that are about 23 degrees from ring plane and the same angle down from ring plane for a total angle between hone marks about 45 degrees. Do not let the hone rotate without the up and down.
I have done just flex honing on a good in spec bore using the same rings and compression usually improves. In your case I would try that and see what happens after the rings re-seat running the engine under load (not much idle) using the mineral (no synthetic) air cooled 2 cycle oil. With just a hone job and same rings I just just start it up and check for any leaks and take it out on the boat and open it up (not much idling) and vary the rpms from 1/2 to full throttle for about 20 minutes then full tilt. This puts a load on the rings and runs them in. After a few runs check the compression cold and compare to the pre hone compression.
What oil ratio are you using, what does the manual recommend? IMO would not run your engine leaner than 25:1 oil ratio. Ex. I run 16:1 in my 2 cycle air cooled weed wacker it runs better than the factory recommendation 32:1, better compression, more oil does that. Same ratio in my water cooled race outboards.
I never use Ethanol based fuel.
I use these hones, the BC hone series, there are videos how to do hone:http://www.brushresearch.com/brushes.php?c1=1
I find best price deals at Summit Racing auto parts, here is the hone for your 1.75" bore:https://www.summitracing.com/parts/brh-bc13424/media/
You may find a better deal?