I have the choke rotated so it is out of the equation for now, hence my surprise that it was still a factor. Thought I'd get it running properly, then mess with the choke. Pain in the ass that you have to take the carb off to adjust much of this stuff. Wouldn't mind except for getting gas all over the place.
Regarding the flakes - they were few and tiny, but what do I know. It is my first engine. Given that I tend to seek adult supervision for critical bits, and I have a fiend who is a mechanic for Caterpillar. He has built a few engines, generally the top end leaving the short block to a machine shop. His current project is a 521 he built in a '68 F100. Makes mine look like an econobox, in fact, makes my C13 in my motor home look reasonable.
Certainly he is not a builder, but he has installed a lot of new or newly rebuilt engines, mostly diesels, and run them for an hour then pulled oil filter and inspected it (that is why he has the oil filter opener - a CAT part), he was not concerned and felt that the little bits we saw were normal left overs from the machining that you can't get when you clean it.
I have no prior experience to rely on. I will be cutting open the filter I took off today - it has about 40 minutes on it. I'll post a picture.