How do hydraulic flat tappet lifters fail?

Guides too tall for the lift, too log of push rod and/or adjustable rockers preloaded too much can cause this. Was there a push rod length check done and was there a retainer to guide clearance check done? Soft cam and or lifter could cause this as could a poorly ground lobe or lifter face. The other could be the lifter bore or body is out of spec. Maybe too much spring for the break in?

All your break in sounds fine. Did you use a break in oil and was assembly lube used on the lifter face and lobe?