If you're rebuilding the engine (down to the bare block), it wouldn't hurt to take a deburring bit on a dremel and just dress the jaggedness down a little. However, if you're not rebuilding, it's not worth the risk of getting metal particles into the engine. The problem with the cam and lifters is NOT associated with any of this. If putting a new cam and lifters is all you're doing, leave it alone. It's fine. BTW, I have both a brand new 6.1 block and brand new HC block and they both have this sloppiness. Looks like someone just too a hammer and chisel and busted out that thin area for oil drainback.
