I have a couple updates. According to the tach/hour meter I just got in the mail 5 minutes ago I am running that thing at around 5K-5.2K RPM wide open, so I guess my ear tach is accurate within a few hundred RPM. Cool!
The second update is that the motor's back cover started leaking oil at the paper gasket, which is most likely unrelated to running higher RPMs in my opinion. What is more interesting is that when I took the cover off the back of the motor, everything still seemed to be in great condition. The rod clearance felt normal, the camshaft and tappets still looked great, the cylinder wall still had factory honing marks (at least the bottom part that I could see), and it was still very clean inside, there was no sludge or anything else disturbing. I took pictures, but unfortunately my phone didn't save any of them for some reason and I didn't realize until it was reassembled. Sorry about that.
While the engine was apart I also removed the low oil shutoff switch and I took the compression release off the camshaft since I heard that they can come apart at high RPMs and cause damage, so I removed it as a precaution. The engine is noticeably harder to crank over, but still quite easy in my opinion. It actually starts a bit easier now since it will now consistently start first pull with no choke once its warmed up. Before I removed the compression release I always needed to use the choke to start it even once it was warmed up. Not sure why removing the compression release would cause the engine to be able to easily start with no choke once its warm, but I'll take it.
I will post another update if and when something else happens.