What would you do?

Interesting that he used "stell" guides with .0025 clearance. All the shops I know would run either bronze guide liner inserts, or full new bronze guides and finish hone to tighten the clearance up to .001. It makes for a better result (much less runout) using a straight pilot and seat cutters. But anyway...I'd bet they never measured the lifter bores. If you pull the intake, pull the noisey lifter and measure the diameter of it, then see if you can score an inside micrometer to measure the lifter bore. You may get some idea with a vernier caliper if it's really oversize, but I wouldnt call it a true measurement of the bore. What happens is, there is so much extra space around the body of the lifter, that the oil escapes, and the pressure the lifter "feels" is way lower than your indicated pressure. So they never really pump up. I've had that in big blocks before, but not any small blocks. I know they offered oversize lifters years ago.