KevG:
Thanks for the post! This would be another good question for an engine manufacturer on LS.com, but until then, I think we can handle this one.
In one of the Kawasaki Owner's Manuals, it states, "Remove the oil gauge (A) and wipe it with clean cloth." The operative word here is "clean." I don't think it matters if you get a very small amount of lint or paper on the dipstick. Just clean the lint or paper off the dipstick as best as you can. The thing you want to avoid is putting a dirty dipstick back into the receiver tube. You might consider switching to using a rag. Rags are a little more durable than the paper towels, but this isn't a huge deal. Let me know if you have any questions.
Here to help,
Dustin
Exmark Customer Service