So I had a friend over last night to help me muscle the engine in, but it was not to be. Recall that this bike has a shade over 6k miles on it, and I just changed the oil and cleaned the filter. When I drained the oil during disassembly I thought the oil looked a bit funky, but I wrote it off to flushing out the bike after some years of neglect. My last task before engine install was to replace the seals, and the first seal I removed had a bunch of shiny metal in the oil trapped behind. Crap. So I pulled the oil filter again, and after only 50 or so miles, it's half full of aluminum. It's hard to get a good picture, but the snot on this rag is what came out of the filter.
Note the glitter on my hand - it looks like metallic paint.
I then pulled the right side cover to check the sump, and find similar shiny oil along with big chunks of timing chain roller rubber. Arg. Off comes the top end and I find this:
Note the big groove worn by the chain - it's that way on both sides. The roller is so out of whack that during my tune up, it may have actually loosened the chain rather than tightened it, depending on where it was sitting (it isn't round). Interestingly I have two basket 350 engines, both with nearly identical grooves worn from a flappin' and slappin' chain. So this isn't a problem specific to this engine.
On the up side, the wacky centrifugal oil filter was doing its job and none of the top end (where the cam rides in journal bearings) showed any signs of wear or the shiny stuff. The cylinders look great - there's some slight staining from water/rust in the left cylinder, but no noticable wear. Everything else looks brand new. I'm going to split the case and clean everything, and order a new chain tensioner. One step forward...