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The valve somehow got bent, the computer compensated for the loss of power on that cylinder by adding more fuel, and that melted your piston. The piston does need to be replaced along with a cylinder head. You will probably find that when the piston is removed, that the rest of it will look fine, the top is just a little disformed.
I had an e450 do this before, but a piston in it and a new cylinder head, its been fine since, been over a year ago.
5 Year Ford Certified Diesel Master Technician
Specializing in: 6.0, 6.4, 6.7, and 7.3 Powerstroke Diesel
Currently Employed as a Diesel Technician for the
Walt Disney World Resort in Orlando, FL.
Specializing in: Detroit/Cummins/International