3 cylinder 2 stroke mercs don't have a head,it is a one piece head and block.What you describe sure sounds like you are starting to blow a hole through the top of the piston,the shinny metal bits are from the piston.lucky for you the plug shorted out before the hole was complete.you should be able to shine a small lite thru the spark plug hole and see if it is so,just rotate the engine by hand till the piston is at top dead center on that cylinder.
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