Walter,
  The starter bushing is normally made of 'sintered' bronze, which is porous
to help hold lubrication. As a result, it is somewhat fragile, as you've
discovered the hard way.
  I wouldn't worry about the small. unreachable piece; if it contacts
anything inside there, it will just end up disintegrating into even smaller
bits.  It not too likely, but it could end up in the flywheel engine or
trans input shaft seal, causing a leak.  You'd have to pull the engine or
trans to find it and be sure to get it out.
  BTW, bushings for a Beetle are available in 12V starter I.D. for a 12V
trans O.D., a 6V starter I.D. for a 6V trans O.D., plus conversion bushings
to go either way.  I believe that the Vanagon bushing will be the same as
the standard 12V Beetle one, so they should be readily available and cheap.

Mike B.

> My starter swap was going fine until I crunched the new bushing while
> tapping it in. Everything was going fine up until that point. I searched
> the archives and used the tap trick to remove the old bushing. I was using
> an old steel clutch pilot tool and a small ball peen hammer to seat the
> new one. They are pretty fragile I guess. Are replacement bushings readily
> available? Also, Do I need to worry about the 1/4" x 1/4" chip of brass
> that most likely fell into the bell housing? I used a shop vac in hopes of
> getting it but I'm not sure if I did.
>
> Thanks,
> Walter
> 85 Vanagon 1.9 Manual Trans.