01 426, Clutch basket rubbing on crank case???

Help guys ,My beloved 426 was getting a lighting generator coil today and i found metal around the flywheel.

Panicking i pulled the filter and found it packed with metal dust to the point it was collapsed.This all happened on a short trip to the jetwash as i changed the lube last time it was used.

I have taken the clutch cover off and the basket and it looks like it has worn on the engine case, there is a deep gouge out of the basket. All the bearings are a1 and smooth there is no play in the clutch basket bushes. Anyone heard of this before, I dont wanna build my motor and have it do it again. I nearly puked!!

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