Fred's right, you're going to have to do a complete engine revision, New barings, a new piston, you name it. There's no way you can get a rusted piston and cylinder to work propperly again. You'll have to bore up the cylinder and install an oversize piston to go with the bored up cylinder.
You'll have to use something that EATS rust to get the piston loose. Because you're going to have to bore up the cylinder the piston will need to be replaced for a bigger one and so you don't have to be carefull with the old piston. I suggest you drown it in WD40 and also spray plenty of it inside the engine to get the crankshaftbarings loose and get some WD40 on the downside of the piston. After letting this soak for a while I suggest you take a hammer and use it on the piston.