I'd definitely go to a finer grit. Do what you can to get rid of the 240 marks without washing out your etching. I'd avoid the hinge area and not worry about the steel between the scales you cannot get to easily. When you get to the 800 to 1200 range on the steel use that polish and your abrasive in conjunction. The by product thereof will become black and messy pretty quickly. Laurens is correct in following your grit range on the scales to get rid of the damage done by the more coarse abrasive. You are working this project assembled so you'll have to be careful of the collateral damage and work both equally. Just be careful not to remove too much scale material, only that amount necessary to clean it up in a very careful manner. You should pretty quickly get to the point where you can make your final progress with the polish and a rag. At that point a good washing with hot soap and water, a hone, strop and shave will be your reward.

You're doing fine. Stick with it and take it slowly, methodical.

Regards

Chasmo