IMHO (and relatively ignorant opinion), I'd always use square ports.Steam admission & exhaust is sharper. Filing round holes square in liners is easy enough, if tedious.
I'd caution against using "straight" PTFE for rings; much better in terms of resilience to wear if you get the graphite -filled PTFE. There was an excellent article produced by "Artisan" some while ago, extract here…….:-
"Virgin PTFE is too soft and has a very high coefficient of thermal expansion. The material I use was recommended to me by a supplier who I was in contact with when trying to obtain a material called Flouroscint, which is a mica loaded form of PTFE and has been used by a number of model engineers for piston rings. The firm concerned said that they could not understand why model engineers persisted in using this material because it is very expensive and graphite loaded PTFE was not only cheaper but, in their opinion, more suitable for the duty! I therefore followed their advice and have used rings of 25% or 35% graphite loaded PTFE ever since. The material still has a fairly high coefficient of expansion, so rather than have a large gap in the rings my design incorporates an overlapping joint."
I had produced a few pages showing his jig method of making overlapping joints in the rings in more detail & with photographs. PM me if you're interested & I'll email a copy.