My buddy had exactly the same thing happen with his Hawkin kit gun. Not long after the Pyrodex pellets hit the market, he decided he would ask the guy at the sporting goods store if they could be used in his ML. When we got to the range and he pulled out the pellets, I questioned him about it. I told him they wouldn' t work in his gun, but he loaded it anyway. The guy told him if they didn' t ignite, to put some powder under the nipple to trail the flame to it. He fired, the cap went bang, but the gun didn' t go boom. So he wanted to trail the powder under the nipple. He ended up putting 10-15 grains of powder in there 3 different times before it ignited. The loose powder was igniting, but it wasn' t igniting the pellets. Therefore, he was getting a small explosion every time in the space between the nipple and the pellets.[] Finally, the pellets ignited. It did exactly as you described yours, slow flaming pellet went poof out of the barrel.

As far as the pitting, I would think if the rifling was only damaged where the powder sits, the gun should be OK. You' ve got basicly the entire barrel' s rifling to stabilize the bullet. I would just play with charges to get a good match, but I think you should be good after a little range work.