How do hydraulic flat tappet lifters fail?

Righty Tighty said

I know Rusty probably thinks this block is screwed altogether considering the problems it had before, but I’m really hoping it was just me who didn’t break it in properly. I thought I did everything right with measuring the pushrod length, but maybe I didn’t.

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I may have missed it, but I don't think anybody thinks the block is screwed. Do you have all the lifters and the camshaft out? I would pull the engine apart, check the bearings, bores and whatnot and go from there. It might not be worse than a cleanup, re-ring and new bearings. You'll never know until you get it apart though.