I'm in agreement with others. Looking at the pieces in the filter doesn't seem like engine coming apart inside. Bearing failure looks like little flat pieces and filings. Not a couple large pieces. Cut the filter open(use a sharp knife to not make filings) and cut out a couple inch section of the paper pleated medium, put that in a vice and squeeze all the oil out. Then open the pleats and look closely at the fold areas. A few tiny pin head size pieces of metal would not be alarming. Put another filter on, get a mechanical oil pressure gage and run in up. Oil pressure should hold through low rpm to high. Warm it right up. Check the compression. After a good run up, check the new filter again by cutting it apart.
The engine install looks great! Fly it and see how it performs. If you keep the speed up it will fly great. 80 mph is a nice cruise in my Mark 4. It is the slow flight that suffers. Keep it over a minimum of 50 on short final (just before flare) and you should be safe. Minimum 60 on approach. What is the empty weight? My soob was pretty much maintenance free besides oil changes and plugs. My engine is pretty much stock except for carb/ exhaust and timing. Are you looking for super short takeoff or is 5-700 feet good enough. My Mark 4 would get up around 450-500 feet. With the Kitfox airfoil and 118 horsepower if you coarsen the warp drive you should have 110-120mph easily. Take off run will suffer some.
My subaru EA 81powered MK 4 (80hp) is slowly getting put back together. With the weight of the soob it made a good single place plane. It could climb at 800+ fpm with me and full fuel. Put another person in and quite a bit less. The Avid wing at 29'10'' is not so forgiving with lots of weight. I don't know anything about the KFV wing. How much surface area? My engine never gave any trouble and I would say actually runs smoother than my 80hp 912. My soob install was done very professionally. Everything has been secured, shielded, proper fasteners, carb heat, etc. I see that some soob installs look more like they have been slapped into a go cart than properly mounted on an airframe. With the Avid I learned the hard way about slow approaches. The engine itself has been trouble free. Only problem I can remember was the foam in the air filter starting to disintegrate from age. How the plane actually flies with the engine is the bigger question. If you have enough wing area for a decent glide ratio and 118hp it should be a great flyer. The Maule you are used to certainly has a much bigger wing area.
Is your rad inside the cowling? Cheek rads? I'm still suspicious of the reduction drive. Hopefully they're still in business. Not directly related but thinking of heavy trucks I own I generally see water and oil temps pretty similar. In your case:250 oil and 190-200 water is telling you something is tight. EA81 on it's own has no reason to create that much oil temp.
The dilemma of the sube. With the stretched tail you won't need to add to much to the tail. I think I added 20 lbs. to get my cg right on my Mk IV. Might be worth adding some weight to get it fly right. You might get away with 10-15 lbs.
Get a set of spark plug boot pliers. Work great to hold and pull on the cord when winding it around the gear and truss. Really its a two person job. Make sure the limiter cable is not over the bungee. It can cut it off.