In that location, its probably a port thats been drilled to improve oil flow to the front bearing. Perhaps you can post a picture.

If it were me, I'd put the engine back together, get it back on the plane, and start messing with the tuning.

You didn't mention prop or fuel choice. My personal preference for this engine is an APC 11X5 or 12x4, and Omega 15 for fuel.

Looking at your website - Which plane is this engine on - the trainer or the Mustang? If its on the Mustang, you're going to want to remove the cowling until you get the low end mixture adjusted. The low end needle adjustment isn't accessible with the cowling installed, and you will want to go through several cycles of adjust and test before you're ready to reinstall the cowl.

Brad