Lifter noise

Found it.

Collapsed lifter on number three. The cup that cradles the push rod does not come back to the bottom of the retaining clip and the clip is "loose".

I looked at the bottoms of the lifters and watched them rotate so I'll replace this one, re-adjust the pre-load, change the oil, and button her back up!
 
Thats correct. No chips, scratches, burrs, concaveness (sp?). All are free in the lifter bores. All spinning. Just one lifter that is not fully extended. The retaining clips is loose in the lifter bore and there is almost an 8th of an inch clearance . It is very stuck. I do plan to check again today to confirm. I still have the memory of what the wiped lobe and lifter looked like a month ago.
 
Woodsnakes questions made me go look again. Found two more lifters collapsed. The shop I bought them from swapped them out. Still don't know why they failed. Replaced all and the engine seems to be OK now. Comp Cams and CPR Racing in Columbia SC both took good care of me. I'll get dyno readings soon to see what the new components are doing.