Hi Butch, That liner job is going to have to be redone, it could drop into the sump causing god knows how much damage. If those are 1/8" liners then at 5/32" you are only going to have about 30 thou to bore out. That would allow for a 15 thou shoulder near the bottom to stop the liner dropping. You are probably going to have to turn a corresponding shoulder on the bottom of the liner, so the last 1/4" is 1/8" wall thickness. Failing that, some Indian Listeroids have wet liners, you might be able to use one of them.
Finally a bit of good news with the valve seats, strange how some of the work done to this Lister is top quality and some so poor. Time to blame the apprentice?
Bob