The lip is due to wear - but its very likely you also already have oversize pistons,
or those pistons would be rattling around.
Measuring the actual clearance is a finicky lot of work, you could just repair the leak and if the
bore looks good, clean it all up and bolt it all back together. ?
P.S. Spraying the head gasket both sides with silver paint will often make it like new again, if it came off undamaged.
Let the paint dry, and when fitted the paint lightly bonds to the surfaces, and generally seals quite well.
If it has any tears/rips though, its replacement time.