I used a white scotchbrite pad (the mildest version) to clean up the bore. While the piston rides on the seal, it's still important not to mark up the bore with an abrasive. There was lots of crud inside the bore so this took quite a lot of time to get done right. Also I ended up using a pick to help clean up the grooves that hold the seals.
Here's a good shot of the bore after cleaning. While I removed all the corrosion there remained some marks from where the corrosion was. I hope that's OK, but it has to be better than it was! I'd suggest showing this to a real mechanic if you try to do this yourself.
There is much debate online on weather to use brake fluid or brake caliper grease to lubricate the parts before assembly. Those who dislike using brake fluid claim getting any of it outside the caliper seals is a bad thing as it attracts water and corrosion. They advocate grease as it preserves the rubber and keeps water out. Those who dislike caliper grease claim it could contaminate the brake fluid. I chose to use brake fluid because that is what the Kawasaki shop manual recommended.
Now the hard part. There is a trick to reassembly and I did a bunch of web searching to determine how to do this. You have to put the seal in the bore first. Then the hard part, the dust seal/cover. That seal needs to be put on the inside end piston first! Like this:
Then you carefully insert the outside of the seal into the bore's groove while holding the piston just outside of the bore. I started in the back like this:
Note the piston is not yet in the bore! Its just above it.
Then work the rest of the seal into the groove. Eventually just the front remained out.
And I used a tool to delicately push the remaining seal down into the groove. Being very, very careful not to damage the seal. This is a shot with the dust seal completely in the groove and on the piston, but the piston is still just sitting on top of the bore.
Now you carefully push the piston down making sure it remains straight to the bore. This should be done by hand! Once it started to go through it just zoomed by the seem all the way down the bore. I wish I had controlled it better as It happened so fast when it went in that I didn't get a chance to carefully put the seal in the piston groove, it appeared to just land in there by itself. Regardless, it looks good to me.
Unless you are very confident in your skills I'd leave this project to a professional mechanic.
Regarding the master cylinder, I determined that was shot. The bore was very corroded and you can't hone an aluminum master cylinder. If you do, you destroy the finish and the bore will chew up the rubber piston seal. So I bought a new master cylinder, being careful to get one with the same bore and leverage as the original.
Now, onward to assembly!