Based on hard-won experience - NEVER ignore an oil light. It's never nothing to worry about unless you know EXACTLY why it's illuminating. Even then, get it fixed and operating correctly as soon as possible. Oil is the lifeblood of an engine - one mistake and it's curtains
Calj737's advice is spot on - drain your oil and drop your oil pan. My guess is you're going to see some glitter in your oil pan - I hope not - but from the initial description is sounds like your bike got starved of oil and the motor seized. That is, the internals were not sufficiently lubricated and locked up.
The 10w-40 isn't going to cause a catastrophic failure like that - it's not the optimum choice, but it's not THAT far off ... issues from a difference in oil viscosity between 10w-40 and 20w-50 wouldn't show up for thousands of miles, rather than 300.
From the description, it sounds like you've suffered some serious damage to the motor. I'm sorry about that
You can often find these newer 550k engines for under $500 on ebay - just make sure it's a solid seller with a good track record. They are not difficult to swap with some basic tools - a day or two tops. Just be gentle and avoid overtightening bolts. Unfortunately, depending on the damage, it may be your least expensive alternative.
But pull your oil pan and take a look - snap some pictures and post them up here. There are a lot of fellas on here that know a hella lot more than I do about these 'ol heartbreakers.