Tap, Tap, Tap...

Take the valve covers off and run the engine. Watch all of the pushrods moving up and down and try to find one that is spinning noticeably; that should also be closest to the source of the tapping sound. Shut off the engine, remove the rocker shaft on the side with the collapsed lifter, pull the pushrod out, then use a wire clothes hanger (or other similar hook-like tool) and pull out the lifter. If you take the lifter apart and clean it, put it back together, then prime it (fill the inside with as much oil as you can before you put it back together) by pushing the plunger until it doesn't compress any more. Put it back in, reassemble the valve train stuff, and start it up and the noise should be gone for good. If the noise is still there then it's something more serious.