I think all of this is a chain reaction that started either with a bad block core? maybe it needed line honed and they didnt do so..
or improper assembly.. rather than a new crank they used a turned and refitted crank... what caused the crank originally to be so bad it needed turned??
when getting a rebuilt engine something caused it to need rebuilt in the first place... could be anything... couldve just worn out from high miles.. couldve been grenaded by over rev... couldve been overheated to the point it seized.. we'll never know how they got this block in the first place....
im kind of in the same boat as my "new" engine has serious problems in it.. but hydrualic lifters dont just clatter all day long and be called "normal".. and for the same reason I dont know where my block came from either.. or why it was in an engine builder's shop... so mine, like yours is on its way to a machine shop for closer inspection....
I honestly dont think you did anything wrong to the engine... my friend ken runs 5w-30(10w-30 in summer) oil in his 1991 camaro and has since they day he bought the car new... it has a 305 in it now with 185,000 miles on it. that has to be one of the quietest, smoothest running small block chevies ive ever seen.... its so smooth you dont even hear a rhythm to that engine..... oil stick is always full at 3000 miles too..
now back to rebuilt engines.. I have often heard that some racing engine builders (drag race)will put looser tolerances on mains and rods noting they want lots of oil flow over the bearings for cooling and also noting these engines are run in short heavy duty bursts, never fully warmed up.
so does this shop normally build racing engines but seels a few "stock replacements" also?
my engine builder even told me himself that he built mine a little loose and then sold it as a "streetrod" engine.. not fully realizing the stress that street use puts on a motor.... I think he feels my engine is fine with the lifters clattering away when the engine is hot.. because if it was a drag race engine it would never be running 15 minutes at a time...
street stress is bad... I know for me my hotrod spends a lot of time idling... drive it to work.. then sit in 95 degree heat idling through traffic with the A/C blasting.. or going through a 30 minute 4th of july parade same thing... and I think a lot of engine builders fail to see the differences required to build a high performance(or stock performance) daily use street engine versus a drag strip engine..