I am 97 Suzuki intruder 800 (street bike)

I have 48,000 miles on her, and I will be pretty close to the top end.

If I spec out my engine., and pistons are still in okay condition, can I lightly hone the cylinder walls, and replace crosshatch. and reaplce rings?

You have probably seized the engine, almost certainly if you ran out of 2 stroke oil (the 2-stroke tank doesn't even hold a litre, so has to be checked often).
If it pushes along, in first gear, and the engine turns over (plug out helps), it's not a seized piston. If it doesn't, then it could be a jammed geartrain (try rocking the bike back and forth, still in gear but pull the clutch) or a seized piston. The kickstart being jammed could be either, too.
If nothing else has broken, a seized piston can mean as little as a rebore and new piston and rings, or as much as a new barrel, piston and rings. If it's much worse, then start looking for a spare engine....

Ok today I remove my muffler to spray it, it had been badly scratched from various events. Anyway. I did paint it with a friend who sprays motorcycles and cars for a living so i'm pretty sure the issue isn't here but possibly. After the muffler was re-attached I rode home to my house, but as i hit medium to high RPM's the revs just flat lined at around 5000 and no power was given. I've never had any problem like this before, and it's been a pretty reliable little bike.

PS: My friend came round after i rang him and we took the muffler off to make sure it wasn't the exhaust holding anything back.

Any answer is better than none, so please help where ever you can :)

My Bike:
Daelim Roadwin FI 125cc
2010

Blue Book is $6,105. The low mileage is very attractive, of course, but you must ascertain whether the mods are worth $1,400 to you. They very very rarely are, my friend. That extra $1,400 can buy you another whole, running bike. If the guy selling it to you spent $1,400 on mods, that is his problem. Therein lies the danger of modifying a bike. One cannot expect the purchaser to pick up the entire price of that particular obsession, because the bike has been modified and the performance cannot be certain due to the work itself. Who did it? Was it owner-performed or professionally done? Are there mechanical pecker tracks because of it? If professional work, the parts are value-added, but the labor to put them in is not and you should not pay for that. Offer Blue Book on it and let him explain why you should pay more and then decide for yourself. After that, haggle from Blue Book as a starting point and get the best deal you can. Don't walk in and blithely hand him $7,500.