If that's a 3/8" nut, I'd say it came from the oil pump pickup tube brace. Or it could be from the FEAD bracketry that got dropped in there when the timing cover was off. Th etiming cover dowels are about 3/8" in diameter x 1/4" long, just big enough for a 5/16 bolt to fit thru. They take the guess work out of aligning the timing cover seal over the crankshaft snout.
I had one locking up the same way. I rolled the motor on the engine stand and it would go all the way through. roll it 90 degrees and it would lock up again... come to find out, it was a flat washer. in one position it was flat on the piston, the other way it was laying on the cyl. wall and not letting the piston go all the way through the stroke...
Is there any visible indication of exactly how that dowel and nut was stopping the engine from turning over? I would think that those pieces should have just laid in the sump. You say it turns over fine now but did you put the pan back on yet and turn it over? Maybe in someway, the pan is the actual culprit?
Thing is, I had stood the engine on it's end to get it out of the bed of my truck when I got it home, I'm pretty sure at that time is when these small things became lodged in there somewhere and once on the engine stand, they became a problem while I was spinning it over measuring for the pushrod length, just goes to show how something so small could cause big problems on a running engine, I know most of the time things will just lay in the oil pan and cause no problems, but it's just that one time of something getting flipped up in the right spot and it's all over, I have to change to the front sump pan I have on my current engine, it's still in the car, I just don't have enough time in a day to do anything, working two jobs now....
I understand now - flipping the engine around makes sense how something that small could have caused so much trouble
Anytime I get a used engine I'll pull it apart! You never know who has pulled stuff off and just pitched the fasteners everywhere. I've gotten nuts out of the intake, valve keepers out of oil pans, you name it, it's pretty much been in there! I bought a power steering pump once and when I removed the reservoir to replace the seal, i found a ⅜" fender washer in it! It would never have hurt anything, but how the hell did that get in there?
I do the same thing, I'm somewhat of a forensic investigator when it comes to used engines. You can read an engine's history just by learning to spot things that are out of place vs an engine that's never been taken apart since it left the factory. I learned this stuff when wroking in a sawmill and logging crew, when things in that business break, it's never where it's easy to fix or work on and you learn quick to find the cause of the break and what it takes to avoid it happening again.