Re: what is this??? #1 cylinder
Yep, detonation/preignition, whatever you want to call it. In older cars you could hear it "ping". The fuel was exploding in there instead of burning normally. You can see the piston top is actually burned away from the intense combustion temperatures. It is caused by several things, most likely running too lean on that cylinder. Carburetor jet partially plugged up is suspect. There is a separate jet for each cylinder in case you wonder why the rest weren't affected.
EDIT: Expensive repair? You bet. The powerhead has to come completely apart and piston replaced. Possibly re-bore, depending on what it did to the cylinder. Probably a couple $thousand or more, depending on local rates and other possible damage.