So I have a loud ticking / clacking noise. I dropped the motor out and pulled the heads. I found a bad lifter. Now the question is what all should I do with the motor apart? I don't want to unnecessarily spend money but I also don't want to have to pull the motor out again.

- The current short block has about 140K miles on it.
- Heads, Cam, Lifters, etc. I swapped when it had about 80K miles on the motor.

Should I refresh the short block? (I am not interested in an Iron block)
Anything I should do to the heads?

Bad lift for reference:

 

New LS7 lifters and lifter trays should do it, plus maybe a new high pressure pump, like Melling 10295.
Also check the cam for any marks or wear. If a lifter is bad, its corresponding cam lobe might be bad.

 

Yeah that cam lobe is likely to be smoked... check it carefully. Might not be a bad idea to just do a pre-emptive first strike on it and get a new one along with your new lifters. And of course, make sure that you don't leave something that needs to be done undone, like, fail to fix something that killed that, as opposed to it just dying naturally, such as valve springs. Check those carefully as well, for coil bind and such.

 

And, clean out the crap that was deposited, when the lifter went south.

 

You definitely might need a larger cam.

 

With all the metal peices floating around after the destroyed lifter and probably the cam I would at least check the rod and main bearings. They are cheap to replace compared to a destroyed engine. I would also change the oil a coupla times at 500 mile increments just to flush out any remaining peices of junk. I'm a little **** where all the trash can go...

 

Check the all the push rods and rocker arms as well. Especially the ones on the cylinder that had the bad lifter. I'd swap out all the rocker arm needle bearings for the trunnion bushings