IF the .005 was just ring wear at the top of the cylinder. This is common in marine engines. You can just re-ring the motor. Use cast iron rings, not Chrome. If the out of round can be measured below the middle of the cylinder and you are getting excessive skirt to wall clearance. I would bore it.

Also don't let the fact that the motor has a sleeve in it bother you. A properly installed sleeve is stronger than the block it is in. The sleeves (most) are made of better material than the block.