Just ran into a similar deal on a buddy's boat running a Ford 351W. Not a fresh build, but he'd killed the head gaskets and it had water in it. Found the rear rockers were REALLY loose, no resistance from the hydraulic lifters. Cam looked OK. Replaced rear lifters and it's back up & running.
Lunati says 1200 RPM? I've always run 2000-2500 for cam break-in to get plenty of oil splash, and soaked hyd lifters in oil before installation.