The Phazer 500 engines I have torn down did not seem to wear the pistons very much. I would measure and only replace them if they are near the limit on tolerance. The rings do wear, so I would replace them for sure. This engine does not have anywhere near the horsepower of it's larger liquid cooled cousins. Thus rebuilding at 5K may be premature. However, the newer 500 engine has had more rod failures than it's predecesor the 485. The 2 engines are very similar, so I don't know of any reason why this should be the case. One thing to note is that the cases are real hard to find, as are used engines. So I would check all crank and rod bearings out very closely if your are tearing into it.
Now, if it seems slugish, I would first make sure all is well with the engine and ignition. Then I would suspect that you are losing efficiency somewhere in the clutches or drive train. Make sure all bushings, bearings and the chain are in good shape. Make sure the skid is in good shape and the track not too tight.
Switching to 8-tooth drivers and a Ripsaw track makes this an entirely different sled. The 11% gear reduction is exactly what this sled needs. I don't know why it is so over-geared from the factory. I experienced much improved acceleration, better sustainable top speed except in optimum conditions, and better fuel mileage to boot. I am still trying to find the downside. You can get used 8 tooth drivers for less than $100, and a used ripsaw for $200 or less. Be sure to put plastic skis on it. For less than $500 in upgrades this sled can really be impressive for a fan. Sell your old parts and it is very cheap.