If they're used to getting pins made from half to full hard 300 series wire, and now they're getting pins made from 1/8 stock, it could be that the pins won't spring back like they once did. The yield strength isn't high enough. Most of the 316 I deal with is already annealed (we commonly use it wanting a lack of ferromagnetism) so it's pretty soft to start with: 70 ksi tensile and 30 ksi yield are common spec values. You might have the material certs for the starting stock, so you can check to see if it was already annealed. Then check with the customer to see what they really want, as opposed to what they asked for.
My first attempt at explaining the 'extrusion' is that the outside surface of the bar was in tension from the manufacturing process- however the steel mill made it. The center would have balancing compressive stresses on it. Once you machined off the outer layer, the inner core reacted to no longer being compressed, and grew.
Good luck! Oh, my hat's off to you, by the way- I find it amazing you can turn 9 mil pins from 125 mil bar!