Oil won't move it, if it is hung up in an area where it can get squeezed, you may have an issue. That being said, I have seen a number of thread where people find that collar in their sump, not even realizing it was off.

 

Are you absolutely sure it is in there? I thought one of mine was. Spent hours with a magnet and tried flushing. Finally looked at valve cover, and there it was, "pressed" into cover.

 

Now you have me doubting if it fell in. But it's no where around the motor or floor so I'm assuming yes.

The sump and valley gasket are off... what should be my next step??

 

Did you try sticking a mechanic's magnet down the various holes where it might be lodged against the cam or crank? I found one relatively inexpensively (at Advanced or AutoZone.) As previously mentioned, make sure they are magneticly attractive by checking existing one. Mine were.

 

With spark plugs removed, you can manually turn engine with a wrench, might just fall out, or become visible. One place that would not be good would be the reluctor disk, where it would snap off the nose of the crank shaft position sensor.
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Inspection mirror and strong flashlight from sump are may reveal much.

 

I'm bringing this back up, I've been putting the motor back together and I still haven't found the little ring.

Last thing I want todo before proceeding any further is manually crank the motor to see if it drops down.

I know I can get a nice wrench on the front pulley to turn the motor, do I need to pull plugs or anything or can I just put some elbow grease on this?