I did a compression check on the Paso and found the horizontal cylinder to be low. The bike has Arias high compression piston. Can anybody tell me what I should be getting for compression.

Do compression test for each cylinder and note the readings. Then put a squirt of oil down each spark plug hole and do them again. There will probably me a small increase in the readings (the oil helps the piston/cylinder seal) but if the reading increases significantly you have leakage past the rings . If there is no increase the leakage is past the valve seats.
I'd expect the compression readings to be in excess of 150 psi, at least 10 bars, and to be within 10% of each other.

The results of the compression check for the horizontal cylinder was only 60 psi so upon removal of the head I found a damaged piston and cylinder wall. My question now is do I gain much by boreing it out to a 94mm on both, what do I gain and are there other changes required such as a new eprom chip?

Boring/replating cylinders is an expensive process; you might want to consider buying a used cylinder and piston instead. There are a couple of sets on Ebay right now, and the keep coming up on a regular basis.

That said, there's no replacement for displacement - bigger bore will give you more power across the RPM range. Typically displacement changes don't change mixture tuning as much as much as compression/flow changes; I doubt you'd need to rechip.

Any idea what caused the damage?

Sam

The machinist said that in his opinion it was a bad assembly job by the previous owner/shop that put those piston in bassed only the fact that the vertical cylinder was pristene.