i'm assuming that you are talking about a honda 350, so.......yes, it can cause problems. it can cause any number of maladies to your freshly built mill like: clogged oil channels, an unstable tensioner mechansim, the rubber/metal bit can get wedged into gears/crank parts. just to name a few. my advice, pull it apart and fish that sucker out, you can use a magnet on a stick.
scott from chicago