I guess having the magnetic sump plug there then this make sense, but I'm not collecting a fine paste though. I should have taken a photo really, but I would say its more like the swarf you would get from drilling with a poorly sharpend drill bit. They're quite sharp, the first time I noticed I managed to get some bits stuck in my thumb!
Perhaps I'm being over cautious with it but I'm slightly dubious about the machine as I don't think it has been quite as well maintained as the chap made out - the first time I changed the oil what came out can only be described as muddy water.
Out of curiousity, what type of oil are people putting in the gear box? I've tried a couple so far, 1 being Halfords 2 stroke geal oil and that was rubbish and expensive - made the clutch drag and the other is ATF dexron III which is a lot cheaper and the bike seems happier with it.
Thanks for advice folks, greatly appreciated. Any more tips will be welcomed.
Sam