The broken off tube is most likely the most logical scenario here.
The motor had no upper tube when I bought it but it did have a lower tube that I drove out when rebuilding the motor-
If there was a chunk of tube left in the bore, I really wouldn't know since the idea never crossed my mind at the time.
I have a new lower tube in but I really don't recall taking that close of a look at the bore before I drove it in to see if it was hitting something other than the block casting. All I know is that the lower tube won't go in any further than it is now and the upper tube will only go in about 1/2 inch.
Now the $64K question:
Can I remove the lower tube somehow without having to drop the oil pan again? Perhaps if I screw in a small tap into the tube and then screw in a bolt and try to pull it out from the top instead of driving it our from the bottom?