For lapping the block, I personally go at least to 1000 grit wet/dry (in the wet mode). And, yes, a flat block (preferrably glass or marble) works best for that.
As for the resedue, I'd suggest something with citric acid in it as it should not harm the brass, copper and aluminum in your system, but should be able to to cut through the "film" you are seeing on the block. Any of the orange based cleaners should do.
You may want to preheat the water/cleaner solution before filling the system for cleaning as it will give it an edge in breaking up that stuff.
Good luck!
