It always the #3 going out. You will need to carefully inspect your crank. The #3 oil line lubes the rear bearing and it will often get cooked when that cylinder fails. If there is any "gritty" feel to the bearings or any other damage the crank will need to rebuilt also............could get expensive.
Although it can be done, IMO its never a good idea to put in an odd sized piston in one cylinder leaving the other 2 alone. You are setting yourself up for failure down the road. Best bet is to bore out all cylinders and put in 3 new pistons/rings, etc.. You might want to look at an SBT top end kit, which makes it pretty simple:
Yamaha 1200 Non-PV Cylinder Exchange Top-End Kit -- SBT Jetski Engines, Parts & Accessories, if the crank is OK.
Don't forget to replace the oil lines and put on some good quality clamps to prevent the problem from happening again. A lot of guys recommend the Oetiker clamps for the oil lines.