My #1 walked a lot farther than yours, but I had low oil pressure shorty before the bearing contacted a lifter. The block was out of tolerances and scrapped.

 

Mine did also walk far enough for the lifter to touch it, but not so much as yours did - wow!!

Was your cam tunnel out of line or was there some other problem?

My cam did turn quite easily after the new bearings were installed so I cannot see that it should be much out of line in my engine.

If I could go to the dealership and buy a new bare LS1 block at your US prices I would do that in a heartbeat for peace of minds but unfortunately the supply and pricing is waaay different over here.

 

Yes and yes! Long story. The whole block was pretty much trashed.
Just make sure you're not throwing away good bearings on another issue!