your really gunna want to fix the scratch. it more than likely has a broken ring. you MAY get by with honing, but from the looks, its probably going to need a bore.
personally, ive ran engine before with pretty good scratchs in the wall. not sayin its the right thing to do, but ive ran them with just fine results.
if your wanting to shave the head, then you will want to get the scratch fixed bacause it will start blowing by from the increased compression.
if the engine ran fine, and didnt smoke, then theres not much gettin by the rings. as for rings, you may want to go ahead and pull the old set and put new ones in just to make sure you dont get a worst scratch. that is, of course, if one of them is broken.
-Phil