Piston Hitting Spark Plug

I have a 2000 John Deere 425 that I just purchased with a Kawasaki liquid cooled 20HP FD620D engine and I pulled the plugs to check them and the plug on cylinder 2 was smashed down and a indent on the piston. Cylinder 1 piston has slight contact with piston. BPR4ES factory gap is .030 and cylinder 2 plug was .005 and cylinder 1 was .016. Valves were out of lash. Cylinder 2 Exh was at a .015 Intake was .025(correct) Cylinder 1 Exh .025 (correct) Intake .008. Would this cause piston to hit spark plug? Rods look slightly and I mean real slight bend, nothing even really noticeable. What is the problem??