I am currently working on a 2005 S2000 and am getting a slightly random P1259 (Vtec Malfunction)

Backstory:
This car was previously FI, both supercharged & Turbo'd (separate occasions) by the previous owner. It was only altered from OE for 5k miles and currently has under 60k on the ODO. Upon starting to work on the car it had a K&N oil filter and the factory oil cooler was removed and 'Looped', The car has a unknown aftermarket clutch kit (feels unsprung). The headgasket is said to be OEM but has been replaced. The car has ARP head studs and the rod bearings have apparently been changed for 'boost'

Current situation:
If the car is warmed up and then driven it doesn't seem to get this code however, the car still feels slightly 'weak' mostly the top end just doesn't feel there.
VTEC does engage although the crossover isn't very elaborate.
If the car is not warmed up it will get this code very quickly and go into limp mode...Clear the code while the car is warm and it will not come back on.
The oil pan drain plug is aftermarket with a magnet and there was metal found on it when changing the oil.

Diagnosis:
Oil has been changed with a OEM filter.
OEM oil cooler was put back on.
Valve adjustment (all out of spec)
New VTEC oil pressure sensor
VTEC solenoid screen cleaned

Next steps:
The plan is to remove the oil pan and find where the metal came from but I'm looking for ideas where to look? I was thinking thrust washers but would there be other symptoms id be seeing? Maybe something is clogging the oil pump and the headed oil can slip past? The engine sounds healthy, no bearing noise or anything. Also wondering what would be magnetic to stick to this plug?

 

I know its too late but I think an oil analysis would have been a good idea given the shavings on the oil drain plug. The particles look relatively fine (small) so I don't think you will have much luck looking at the bottom end once the oil pan is dropped unless you start taking things apart, which I would be weary of doing. The oil analysis would be able to tell you what metals were in the oil and thus which parts are wearing... Good luck.

 

update: here is a image of what was found in the oil pan

the material is non magnetic but does appear to be metal. The car starts,idles,and runs fine. No strange noises at any point through the revs.

From what i could see of the bore sleeves they do look slightly scratched

 

I would take oil pressure. May not show anything but something internal is self destructing. Only a matter of time. If it were mine I would remove engine and disasemble for inspection. With history you reported I would expect to replace engine with known good used oem.