That's not much information but it's enough for me to take a crack at this while the pizza's defrosting. You say there are grooves in the piston crown and head. Grooves to me means long straight gouges. I doubt this is what you mean, so what exactly does it look like? Are there small pits or does it look like someone's been beating on your engine with a ballpeen hammer? Was the head marked up from the first seizure. Were there pieces of ring or needle bearing stuck in the head or piston from the previous meltdown? If so, did you clean up the head - smooth ot the potholes and dig out the shrapnel? If there were marks left in the head or , heaven forbid, a tiny piece of ring burrowed into the squishband, they could cause detonation. The foreign bits of metal or even the little cankersores in the head could create hotspots that would ignite the fuel mixture while the piston was still on the way up and give it a pretty good beating. I've seen a couple of engines that were detonating badly and it actually looked like there was a steel ball pounding the head and piston.
When you rebuilt the engine did you split the cases and wash out the bottom end? Shrapnel can stick in the crankcase and blast up through the transfer ports of a fresh rebuild, do nasty things inside your bore, and then exit through your pipe, never to be found.
Did the engine actually seize or did it just stop running? Did it gradually loose power and quit or did it get noisy and rattly and loose rpm fast and jam up? You say it won't start now so I'm assuming that you can kick it over which means the piston's not seized in the cylinder now. What happened when it blew up the first time?
Does the engine still have compression? Pull the plug and ground it to the engine, stick your thumb over the hole, hold the throttle wide open and kick it over fast to check compression. If you kick it over fast enough air should squirt past your thumb. At the same time watch the plug for spark. Maybe some shrapnel beat the spark plug gap closed while it was speed baggin' away at the piston. Were there any signs of the piston melting? Were the rings stuck in the grooves at all? Did you look in the bottom end? It's been a while since I worked on a 2 stroke - do crank seals still pop out?
