I'm going home now to install the new lifters, clean the passages, and
make sure the tubes are open. My brother, who is helping me, was going
to get out of work early and pull the head again (intake already off so
we're half way there) and make SURE that the piston is not hitting the
valve due to the lumpiness on the surface. I've ordered a new piston
and rings just in case it is.

I will also make sure to install the rotor 180 degrees oposite to the
way it was. Will let you all know how it comes out. Thanks for all
the advice.