Matt;

"Sludge" (like the black cottage cheese found under valve covers years ago) does not occur in modern oils because they have detergents to keep things in suspension and able to get drained out at next change. Oil blackness does not occur as a result of storage.

I'd clean those chips well, then subject them to a close inspection under a lupe...any machined surfaces? Crystalline structure? Fibers?

Cheers

Not sure where the photo went, so here is the link to Flickr

https://flic.kr/p/s2ZXcX

Those look like timing gear teeth to me, though I wouldn't expect them to be attracted to a magnet.

If you run the engine with a damaged timing gear, at some point, it will stop running; and it will stay not running until you replace the timing gear. Often, this failure does *not* cause damage to other parts.

I'd loosen the bolts that secure the timing cover to the front of the engine and peek inside. Turn the engine over and look to see if there are damaged teeth on the gear. If so, replace.

It's a bummer, but not really a huge deal.

Cameron
Portland OR