Be Bliss,
Looking at the first picture of the rack, it looks like there might be a couple of broken or damaged teeth on the rack right near where the cable chain is bent around in the image. It is hard to tell from the picture if that is the case or not. If that is the case, that would explain the metal filings. The broken portion of the tooth may have gotten ground up during operation. Alternately, it could be a localized gear tooth surface failure (severe pitting). I don't know what would cause the broken teeth except for possibly some hard debris getting in the gear or rack or the tooth breaking from fatigue. What I am seeing is in the middle of the tooth, so that would NOT indicate that the pinion was out of alignment with the rack. The rack looks a little dry to me, like it could use some grease. Running without grease for a long time could cause premature wear (pitting).
Caveat Emptor: I am a total noob with CNC Routers, but I am a mechanical engineer with a decent amount of gear train and automation experience.
-Robert