Well, I am not a motor head by any means so this is mostly my opinion and to stir the thoughts of the pony builders here. This is a 250?
Your power valve not working will make no top end (WOT) if it is closed. Not good for breaking a motor in. You basically are cutting the flow in half... 250 a 125 at top end.
Your compression reading will be, of course, at TDC of the stroke. It looks like your ring is not seated correctly at the top of the cylinder. The marks of the piston/rings on the cylinder wall need to be the full length. It looks like yours are mostly on the top of the cylinder and quite uneven for the work you had done.
This brings a couple thoughts.
First: Improper bore size. Kinda looks to be a bit too big. The picture of your piston shows that the piston above the ring is sliding against the cylinder wall. If it is too big of a bore you can't get the piston/ring to expand enough to seat the ring properly.
Second: Is this a cast aluminum piston (like stock) or a forged aluminum piston? If this is a cast aluminum piston in a bore set for a forged aluminum piston it won't work. The cast piston does not expand under heat to the diameter a forged piston would, so it would stay sloppy and not give good compression with the resulting slop through all temperature ranges. Forged pistons are quality parts but need more warm up time before heavy operation. This gets the piston to full expansion and compression.
A solution? Well, did you get the cylinder repaired, bored, sealed, and the piston/ring from the same place? Did the machinist have the piston and ring on hand to do the bore?
Might want to get another ring, hone the cylinder, and redo the break in. Don't play around with an "easy" ring setting. Set it like you mean it.
Warm up to op temp (about 2-4 mins) at idle (not riding it) with little blips to keep it from dying. Let cool down completely (30 mins or more), and repeat once. Then take it to a riding place where you can really work it. If your skills are not up to the task, let an experienced rider set it for you. Anyway, start the bike and let it warm up a bit (2 mins). Get out to an area after it is warmed up and that you can put it under a load and get though all the gears. Now your motor will have about 10 mins of run time that will clean up the edges on the ports and get the ring settled in. GET ON IT!!! Ride it like you stole it!!! Run it up some hills to get a gravity load on it will help it alot more than just flat straight runs across a field. I break my bikes in at the dunes and that is a load, sets the ring like a champ.
Anyway, I am not a motor builder or an expert so this is my opinion on the break in and your motor. Come on you piston guys, what does this cylinder look like to you?
Sly
