Assuming a hydraulic lifter...check rocker arm to valve stem clearance
allowable For 1970 351C = 0.100" - 0.200", desired 0.100" - 0.150".
Lifter noise could happen if rocker arm adjusting nut loosened or you have a varnished lifter, gummed up, dirt, bubbles in lube oil (too much oil or too low oil level)...check before condemning lifter. Or bad lifter.
If you're going to be doing any major work on your Mustang you should get the 1970 Ford Car Shop Manual. (4 volumes) I picked mine up years ago and it covers Chasis, engine, body and electrical. Try searching ebay under Ford Service Publications (Form 7098-70-1, 2, 3 or 4). Another good reference is MOTOR Auto Repair Manual.
was it stuck in the bore? or did it pull out easy?
When you look at the valve trane, the cam pushes the lifter, lifter pushes push rod, push rod pushes on rocker arm, rocker arm opens valve. If any of those components are bent (bent valve), the lifter could be stuck at the bottom of its travel and take a beating. You may want to pull the plugs and manually rotate the crank and watch the action on that lifter. Compare it with one that's good. With the plugs out you won't have any compression to deal with so the crank can spin. Its not the easiest way to do it but works. Alternate method is to "bump" the starter but you won't have as much control and may miss where its binding up.
I'm thinking a mechanical bind somewhere in the path.
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