Yes, it is iron sleeve.
Sounds like the bottom ring is not wiping the oil off the cyl wall or perhaps the drain holes from that ring are all clogged.
If I were u, i would remove the piston and clean the piston and replace the rings. I mean it is 30ish years old....
While you are at it, rent the cylinder bore gauge from Autozone or the like and measure it while it is open to see if the cyl is out of round.
Gasket wise, i used silicone gasket when i opened mine up, and you can always make a gasket for the cylinder head if yours falls apart.