That button looks F'up for real. Not sure, but it looks like water damage. I can't tell if thats detonation pits from the color in the pic. What does the piston top and sleeve look like? If your trying to get the back cover off, make sure you rotate the piston to TDC or close to it. The piston skirt will break off, if you try to force the back plate off with the piston at BDC. Feel if there is any resistance when you rotate the crank. A sleeve with good pinch will usually push the sleeve out of case or the piston will get stuck as it gets closer to TDC.