Bad Lifter?

[Jason Spears]

I was running my truck ('87 GMC 1500 4x4, 305 TBI) on Sunday afternoon with the hood open and noticed a knocking sound. I could feel the knock if I put my hand on the valve cover when the engine was running. It seemed to be coming from the third valve from the back on the driver side. I wasn't quite sure what it was so I took the valve cover off to see if the valves needed adjusting. There was no play in any of the valves. I tightened the nut up about a 1/4 turn anyway while the engine was running but it made no difference.

I took the truck to one of the local garages and had the mechanic look at it. He figured that it was the lifter but wouldn't know unless he took the engine apart. He gave me an oil additive he said may unsitck the lifter but to bring the truck back if it doesn't work. He told me that if it was the lifter I should replace all of the lifters along with the cam and timing chain. Does this sound right?
I was talking to a GM tech that I know and he said these trucks sometimes came with "soft" cams that were prone to wear.

I'm wondering if I'm going to pay someone to take most of the top end of the engine apart should I take the opportunity to get the engine reconditioned at an automotive machine shop. The truck has 220 000 km (~130 000 miles) on it. My dad used it as a work truck for 14 years before he gave it to me. I figure that just to get the cam, lifters and timing chain is going to cost between 1000-1500 bucks. I priced a goodwrench longblock for $2800. I haven't got a price for a rebuild but I estimate it at about $2000.
(If these prices seem high just remember they are in canadian dollars.)

If I did this I might want to put a sligtly better cam in the engine. I don't want anything that is going to screw up how the truck is going to idle or screw up the computers. Does anyone have any recommendations?

Any advice would be greatly appreciated. I have no idea what to do now. Thanks.

Jason