Grinding noise from headset

I have a 5 year old Merida Ride 100, which has done about 5000km. It mostly has been in dry conditions, but has seen some wet conditions once in a while. After the last ride, I noticed some grinding sound from the lower end of the fork. It felt like grime stuck between the bearing and fork (the bike has caged bearings on both upper and lower side of the fork).

I removed the fork and there was indeed a lot of grime in there. I cleaned the bearings, fork and the headset thoroughly with a degreaser (WD-40). Wiped it clean again with a rag, inspected that they were spotless. I then applied grease (Park Tool HPG 1) on the bearings and the headset and reassembled the the headset again.

The sound has now reduced, but I can still hear some sound when the handlebar is turned, but only at certain angles.

This is the only pic I took before I reassembled everything back again (if it helps):

The next thing I suspect are the bearings themselves. Could worn bearings be cause of such grinding noise (sounds somewhat like metal/grime on metal)?
Any other suggestions as to what could be going on here?

Thanks!