Brad,
Could you take a close- up pic of the slag inclusion? I don't think I've ever seen one myself, I would hope one of them would announce their presence with a bull horn! But, I'm sure it's not that obvious, as most things like that aren't.
Another question, could you have attempted to grind it out? I know doing that could have ruined the blade, but isn't it already ruined with the inclusion? To me it looks like a re-design is called for, just in an attempt to save whatever steel is salvageable.
BTW, LOVE THE EPOXY SOAKED CORD WRAP!!! I recently saw one that had a 550 soaked cord on it, I just never thought of how well that works, the maker says he soaked and massaged the epoxy into the cord before tying it on to the tang, then gave it a good (lite coat) brushing with some as well. It looked a lot like yours, GREAT! And felt incredible in hand! Thanks Bud, Rex
I thought to add this as well, did you etch the blade? If not, and you're planning on doing some testing, shouldn't you etch and polish it out? I know that's a lot of work, but to get an accurate test, shouldn't the knife be as you would normally sell it?