I know, I know... old thread. But! I'm in the same boat wrt the WOT cam and wanted to answer the question for posterity.
1. Yes, the indicated cracked part is the WOT cam. There's a
good thread on Rennlist.
2. Yeah, paint on the inside of the valve covers. WTH. I blasted and powdercoated mine; we'll see how it holds up. FWIW, it was a real biatch to get the old coating to come all the way off; it took hours in the blast cabinet.