Yesterday I finally sidelined the brat and began the proccess of stripping what useful parts there are and drained the oil. I check it and noticed it is gritty with what looks like shavings.

 

What would the cause(s) be and based on the cause(s) would it be worth doing an overhaul on it?

What size of grit? I'm thinking it probably spun a bearing. Only way to know for sure though is to pull it apart and have a look.

 

In theory (keep in mind I just thought this up - haven't tested it) if a rod bearing is missing or loose you should be able to hear a small clunking sound if you spin the crank a little ways and then spin it the other way.

 

I had an EA81 that quit because of a damaged and then disintegrated distributor gear on the crankshaft. I'm not sure but I think it was probably shavings from that that caused one of the rod bearings to end up in tiny pieces at the bottom of the oil pan. Needless to say, that engine was not worth rebuilding, but I had abused and then neglected it (it ran for a long time with probly 1/4 of the disty drive gear broken off)!

 

Anyway, I say tear it down and see whats falling apart. It may be you caught it in time.