Mark, if you examine that black "silt" I think you'll find it consists of particles of metal that have worn off various moving parts, coated with goo that used to be lubricating oil and/or carbon sludge that has blown past the piston rings. Regular oil changes usually remove most or all of it, provided you always warm the engine before changing the oil, and if possible, tilt the engine while draining it. (Some people use "flushing oil" to help clean up in there: they put a mixture of oil and kerosene or diesel fuel in the engine in place of oil, start it, and run it at idle with no load for less than a minute before draining it. It can be very effective in washing away the rubbish, but I worry about the residue of diluting agent that stays behind after draining the stuff.) You should take a look at the breather system, especially the Positive Crankcase Ventilation valve (behind the flywheel on the small OHV Hondas I am used to, or in the valve chest cover on the side of the engine for a side valve Briggs). When an engine has oil consumption it usually has blow-by, which pressurises the breather system by blowing crud through it. The gas makes it through into the engine's air intake, but the crud often parks itself along the way.
Thank you for posting the instructions for timing the camshaft and balance shafts. It looks as if you have a workshop manual for the GV400, or at least for a G400 - I can't find a free supply of either on the internet, so you are well ahead of me.
Don't forget you have to adjust the tappet clearance after you lap the valves, because they will sit a bit deeper in the valve seats, reducing the clearance.
