Bad Hadraulic Lifters, Maybe?

Yes ,the pump should be opened to have a look. I had an issue 20 yrs ago when a chunk of slag went through the pump,lost 10 or so psi and wondered why. LOL Opened the pump to find a nice dimple in the rotors. Put it back on and raced it for years. Glad it didn't lock the pump. I see no way a chunk of slag did the damage the OP posted,but maybe I'll learn something new. Later