[chiphead]

I assume it only ran a second or two? I'm thinking it aspirated the rust from the exhaust while cranking or as it started to run. Black and red debris would be carbon and rust from the inside of the header tubes.

What are the specs on the cam? I would expect that it would have to be a fairly large cam with a decent amount of overlap (or early exhaust opening event) to do something like this. It would be a huge amount of reversion to suck that much crap out of the exhaust.

Was the block pressure tested and magged for cracks? Only other thing I can think of is rust/water from the cooling system getting into the cylinders.

What is the exhaust system? Open headers?? How old? Shine a light in there and there should be a lot of rust.