Thread summary:
Clearly, I did indeed burn the piston. The saw is making it's way across the country for a hopefully better life elsewhere.
Possible causes, in approximate order of likelihood:
1) I attempted to adjust the carb high setting, starting too far off the correct mark. Resulted in running too long at WOT to find the rich spot. => lean seize
2) Air leak near the spark plug (as later diagnosed by the dealer) caused the lean seize.
3) My woods port, which also introduced a new spark screen, may have scavenged in debris, most likely from the screen which didn't hold up. The actual grinding to enlarge the exhaust port was done cleanly, so highly unlikely that debris came from that. The screen actually broke though, so possible debris from the screen.
4) Due to the unknown history of the saw, there could have been any number of other possible issues with the saw. Possible a fuel line somewhere in or out of the carb. Possible issue with the bearing. Just before I bought it, the flywheel and piston had been replaced.
So, unfortunately, it's impossible to say for sure what happened, and whether I made a bad purchase or whether I screwed it up myself. I'm going to assume that both are true. Too many questions for me to pursue it any further. That's why it's moved on to someone braver/smarter than myself. Expensive lesson, kids!