If cylinder maintains a perfect circular shape can install a new ring set, if oval will need to bore cylinder at a machine shop to next piston and ring 0.5 mm + size. If that's a rebadged Tohatsu OB as piston seems so, Tohatsu factory specs states 78 psi, but data could be way off ? Anyway120 psi is too much for that small OB.
Will need to install a new head gasket along a base gasket, torque both to factory specs with a torque wrench. Take advantage to clean all powerhead water paths and decarbon cylinder head if needed. With a new ring set or next size piston and rings will work as a charm along renewed agility.
Change carb middle o'ring, probably hardened and not sealing both carb's matting surfaces as it should ? Before adjusting float height check if floats needle is worn, must be sharp pointy, if rounded and with a neck change it as will wary float height. Float border must be adjusted to be even to upper carb border when turned upside down and that's with a pointy shape needle .
Once correct fuel/air mixture screw is dialed off water, will need to adjust idle screw once on water as rpm will vary to lesser ones, Sometimes OB will tend to die due to poor idle adjustment off water. Simply adjust idle speed screw CC tad more till OB doesn't die when gearedf forward and as the French say voila.
Happy Boating
