You said you played with the timing, did it get better or worse? The problem with the lifters may be push rod length. The 96 block came with a roller cam, I assume you still have a roller cam. It could be that you don't have the correct pushrods or lifters. If you can bottom the rocker out on the stud without loading the engine(lugging) you have something wrong. Are you getting any oil to the top end through the lifters. Keep in mind that roller blocks must use roller cams.
