Well after a few hundred bucks, some new push rods, some new lifters....and countless hours of head scratching....it's fixed. Turns out the oil filter lines on the remote filter were put on backwards (who the hell did that!!). ooops. Luckily an LS motor is smarter than the average redneck. The cam and rod bearings get oil first then the lifters. So, with the lines being backwards and going through the filter backwards the motor was seeing around 15ish lbs of oil pressure. This is enough not to scar it for life or tear anything up, but not near enough to pump up lifters.
The lifters though were VERY weak so it could have been a multiple problem. I am gonna tell myself that since I spent two nights and about $300 replacing them.
Non the less....its runs great now and does what it's supposed to.
The tune seems a little rich and it's not coming back to idle right (seen a lot of these things do this) so I am on the phone with Jim's today to see what he suggests. I am also gonna plug the scanner into it tonight and see what were looking like. It runs good enough to hammer on though, so fuggit....shes gonna be in Kentucky for a beat down.