While thinking this through and you approach to resolving it, Do not forget about the cam bearings, valve guides, Piston skirts, cylinder walls, rockers and shafts etc.
I'm thinking this motor had something floating around inside likely before you bought it. What it was is anyone's guess.
A cam lobe would be high on my list of suspicions. I can't remember when the ZDDP thing surfaced but alot of people were eating camshafts about that time, 1999-2000 ?
I would pull the motor and do a complete teardown/inspection/rebuild. Or buy a crate from a reputable source, and sell what you have to recoup some $$