Pieces of steel in cylinder??
That's bearing material...
You need to tear down the block and get all of that out of the oil passages...
Get a wire coat hanger and straighten it out, then poke from the hole in the cam bearings down to the main bearings to knock that extra material out... Then blast it with a pressure washer or take it to to a do-it-yourself car wash and blast all the passages clean...
This thread will help guide you through tearing down the block and cleaning it out...
How to Rebuild a Small Block Part 1: Block Prep