Update: well, I found where some of the tip of that valve went... All lifters checked out on the driver side, the rollers spin without issue, but cylinder 5's intake lifter had some impressions on its roller that appear to match the same steel that came off of the valve tips.
Cylinder 1's intake lifter was a different story, it was stuck in the bore when I tried to remove it. After oiling it and spinning it, I was able to get it removed. However, I found tiny chunks of what I theorize to be steel (I sadly didn't save the debris to check it....). Those tiny chunks were causing the lifter to not want to come out - however, nothing was found on the roller of the lifter, and since cleaning out the bore, the lifter slides in and out normally now.

The bore does have one spot that I can feel (the one I point out with the arrow), the other markings in the bore are smooth (and appear to be cosmetic marks)


Photo Cylinder 5s lifter with some embedded damage (presumably the steel from the valve tips)



I got the heads back from the machine shop, they said the valve guides were in great shape - everything else looked good. I had him replace my valves with these:
https://www.michiganmotorsports.com/...2+LS+Valve+Set

I will be reviewing the passenger side today to see if I get any more surprises - for now, I am thinking of at least replacing cylinder 5s damaged lifter, an running with the bore damage on cylinder 1 since it is kept to the inside of the bore, and does not go out either end.

 

I had my 10k mile and 2k mile CHE trunnion kit sent off to CHE directly and they looked it over. They said they have never seen anything like this ever..... Apparently I am the first of my kind - I don't have photos of the 10k mile CHE kit in this post, but they were trashed hard and had very bad uneven wear. I will be getting a new CHE kit + new rockers + replacing 2 or 3 lifters that had some pitting. My heads are also back from the shop with new valves. I will check what pushrods I need, but I think after all of this, I should be good to go....

I am also just going to ignore the lifter bore damage and just replace the lifter.

 

If you had the engine tore down, I would run a cross buff down that lifter hole at a medium rpm with quick up and down honing motions, a few strokes. You don’t want that burr you can feel to cause binding…which it will if you can feel it by hand. It will gall up and cause you binding issues if it’s not addressed. Typical lifter bore to lifter clearance is .0015.
But since you don’t have this thing tore down, I don’t know what to tell you, as far as getting that burr out of there. I measure every lifter hole on every build with a dial bore gauge to tell me what’s going on. Never assume it’s going to work out by itself…it never does.

 

Would you pull the motor if this was your motor?