The piston would have to be pretty loose to be able to hear it when the engine is running. It happens with very sick and tired car engines, but those are a whole lot quieter than 2 stroke mower engines. I wonder of a loose big-end bearing isn't more likely? If the piston is loose in the bore you can usually move the piston around by putting your finger on top of it and pushing it from side to side. If it moves, it is due for replacement. For a 2 stroke Victa, I would expect a better piston and cylinder would be no further away than a nearby nature strip, so I wouldn't contemplate boring it - just scrounge up some better parts.
I doubt it is ever worthwhile doing base-engine work on a common model of 2 stroke Victa, just because you can usually get a better base engine for just about nothing. I think the usual cure is to gather up a decent base engine, then mix and match the rest of the parts until you have a complete engine in good order. However just for the fun of it you might just replace the piston and cylinder (with junked parts) if the rest of your engine is good. Be sure the big end and main bearings are good before you go to much trouble, though.
