I wouldnt think it is a valve/lifter issue. Upon build-up the lifters rattle pretty good until the pressure builds up inside, like 10-20 minutes of the engine running. I dont think the machinist could have ground off that much but I guess it is possible
What timing belt/tensioner combo are you using? what pistons do you have? where did you source the head ?
Can you do a leak-down test ? If so try it with the cams out as well.
1972 Volvo 142e
1983 Volvo 242 turbo 16v
1995 Volvo 850 T5R