1) Did you have any abrasive on the paddle? If you did you would have overhoned and ruined a shave-ready edge. If not, you could have placed too much pressure and rolled the edge.
2) To get rid of the chip, you'd need to use a faster-cutting abrasive like 1000 grit wet-dry sandpaper, equal number of strokes and pressure on both sides. Then you need to take it to the Norton and do the pyramids until it gives you a pull-free shave before taking it to the abrasive paddle surface. Make sure you tape the spine with electrical tape to avoid honewear-galore.

MAKE SURE THE NICK IS COMPLETELY GONE BEFORE STARTING TO HONE!!!