They couldn't find anything similar to the small metal piece they had on the shop towel but they did find the engine case was gouged in the oil pump area. They got a new engine case and all associated bearings to replace the gouged case. The original problem was rear wheel bearings and probably the output shaft (my output shaft is in worse condition than hers) and bearings. Finding that little piece of metal when they drained the oil is what led them to tear the engine apart.
I guess my biggest issue with the dealer is that they only worked on the motor just enough to find 1 problem and then let it sit while waiting for the parts to fix that 1 problem. Then they tore apart the engine just a bit further and found another problem. So they stopped working on it and let it sit again until the new parts came in. Then they started putting it back together and decided they should replace the piston rings instead of reusing the old ones and let it sit while the new rings came in. When the rings came in, they finished putting the engine back together and then decided that they should put new exhaust seals on it. You guessed it, they let it sit again while waiting for the exhaust seals to come in. If they would have tore the engine down, noted all the parts needed, ordered them and installed them when they came in, I think we would have only been out of commision about 2.5 - 3 months (the complete engine gasket set was on backorder for two months). All during this time, they have refused to work on my Spyder as they didn't want two Spyders completely torn apart in their shop. Not working on my Spyder wasn't that big of a concern back in December but now it's February and I'm tired of waiting for them to tear into mine.
I'm making plans to pick up my Spyder from them this Saturday and take it to another dealer that said they have the time to start on it immediately.