Wanted to update this post. I replaced the rods with new. When I removed the crank I found the flywheel side of the crank bearing surface in the upper case was probably the aluminum culprit. I've attached some photos. I carefully cleaned it up (last two photos). I did not check clearance because, simply, at this point it runs until it hits the trash can so it doesn't matter.
Everything went back together, new gaskets. I decided to move to 5w-50 for a bit of viscosity help on the hot side.
Motor sounds great and is running well. We'll see how long it lasts - we're at 1,500 hours currently.
Why is there wear up here? I don't know as a fact. Oil does need to be pumped up to this bearing surface. Maybe oil ran low at some point. I was careful on setting the new upper crank seal (replacing the original factory installed seal).