1. The Norton 4k needs to be lapped down more than other stones to reach the quality grit level to which Lynn is probably referring. The 4k does seem to improve with more lapping; however, a full 1/8 " is more than I needed to go. The other stones will not require this much lapping.

2. You have the right stones to do almost anything. You may want to post a picture of the chip, but it is likely that you can repair it. You will need to stay on the low grit 1000 stone until the chip is gone. If the chip is very deep then you can save some time by pulling the edge along the SIDE of your 1000 stone until you can barely feel the knick by running your fingernail along the edge. Then go to the 1000 to set your bevel (it should cut hair on your arm before moving on) and finish the honing progressively or with Lynn's pyramid steps. Most newbies move on too quickly before the bevel is set.

3. Don't worry about the discoloration. You need to lap this side until it is gone. The stone should be fine.

Hang in there. Keep practicing. This is a challenging hobby, but it can be a very rewarding journey.