Did you observe the EGT on #3 at the time of 500 CHT? If normal, that eliminates detonation as the cause.
I would not too quickly dismiss the possibility of a plugged injector and accurate sensor. That is far more common on a new system, where contaminants have many ways in via the installation. Also, he is in the ring seating phase, assuming the engine wasn't run in a cell for an hour or two first. I had someone playing with the mixture on my first flight and the CHT quickly hit 460 before I shoved it full rich (this 30-60 seconds at that temp was enough to glaze the cylinder by the way). That was in the first hour of running with no test cell time. 500 is not out of consideration for an engine that's seen less than an hour or two, depending upon the hone finish used.
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N64LR - RV-6A / IO-320, Flying as of 8/2015
N11LR - RV-10, Flying as of 12/2019
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