Answers to questions (wait to hear from the pros):

1. Bad hydraulic lifter

2. Take off your rocker arm assembly, clean all the assembly parts (including the interior of the two rocker “tubes”).

3. Replace the bad lifter (maybe someone will post how to clean/repair it)?

http://chevy.oldcarmanualproject.com/shop/1950cpcmm/50cpcmm05.html

Tim
1954Advance-Design.com
1954 3106 Carryall Suburban
1954 3104 5-window pickup w/Hydra-Matic
The 216 and early 235 engines are not "splash oilers" -- this is a splash oiler.