How do hydraulic flat tappet lifters fail?

I’m halfway kidding because Rusty helped out last year when I had to rebuild it. He knows this engine has a history, and I suspect he might not think the original problem was fixed.

All the lifters and rods are out, except for the #1 intake lifter. It’s mushroomed a bit and will need to drop out when I pull the cam. I had all the lifters and rods lined up in order until the damn dogs ran across them. Now I have no idea which came from where! No matter, I’m replacing all anyhow. But I did want to be able to inspect the wear in respect to where they came from. I do know one of the lifters from #7 looked funky on the cam side.

The cam will likely come out tomorrow, assuming I can get this damn damper puller to work. Initially I was going to just inspect the rod and main bearings and replace if necessary, but now I’m thinking I might just replace them anyway and not take the chance. They’re too affordable and too important to not just do it.
Pull a couple of main and rod bearing caps to inspect, if there is no damage no reason to replace. I know an individual who flattened 3 lobes, flushed the engine with alot of diesel fuel, changed out cam and lifters, oil and filter, put the engine back in service still running today many miles later.