Clare-Branden Jones

I am working on a 2006 Trailblazer with the 5.3 AFM engine. This came to me with a p0307 cyl 7 misfire.

I checked the plugs and the coil, but knew it was valve train as it was ticking like a collapsed lifter. I ended up pulling the valve cover and noticed the #7 intake rocker was not moving while running the engine. I also notice that the push rod is not at the all the way up.

I did a engine flush hoping to clean anything that was keeping the lifter from "pumping up" would clean out. But examining the oil I found glitter in the pan...

I am not sure now where to go with this? Do I pull the heads and replace the lifters and check out the cam? If so what options do I have for cam?
Can I do a afm delete since I may have to replace the cam anyways?

I also have a video but don't know how to post it.

Video link on youtube