Do you have any pictures of the damage...we like (
really like!!) to see what happened! I bought my 261 from a person who straight gassed it right off the bat. Got so hot the muffler turned blue. I should have changed the oil seals...but at the time that was more than I had taken on before. Running it recently and realized I have an air lean on one of the seals....so time to replace them, might even split the case and change the bearings depending on how they look.
You should look at this as an opportunity to dive in and replace the bearings (oil seals too) and then the piston and cylinder. With aftermarket parts you are looking at about $75 bucks. I just changed the bearings on my Husky 272 and 2100 and a MS 391. I was intimidated by them, but now feel more confident.
THE DUKE'S NIKASIL COATED PISTON AND CYLINDER KIT FITS STIHL MS261 1141 020 1200 44.7MM - $60.00
THE DUKE'S CRANK BEARING AND SEAL SET FITS STIHL 024 026 MS260 MS261 MS240 - $14.00
I am waiting for Duke's to get their performance piston back in stock, one for my MS 261 and one for my Husky 2100. I just put one the performance pistons in a friend's 261 after honing their cylinder (aluminum transfer from a cold seizure) and it is running great, I really like those pistons and their price too!!