[RICK LAKE]

CobraV8 Simon, to start with, I couldn't open the picture.
Here comes the questions, What is the piston clearance to the deck of the block? Was the deck of the block cut to straighten? Where the heads machined down? What is the crush of the head gaskets? That camshaft should not have hit the pistons unless some of these machine operations where done to the block or heads. Was the camshaft setup correctly? Some camshaft come with a 4 degree advance built into them.
If you drove the motor 5k miles before fining this problem, it sound like a over rev issue with the motor. When the block and heads are cold it is alot more possible to have an interference issue than when hot. This also depends on the material the block and heads are made from. Aluminum expands faster and larger than iron.
As far as repair of the motor, rods and pistons to start should be replaced. A hit is a hit. If you put the rod through the block the party is completely over. Have the crank checked for balance and cracks. You could have the rods checked for length, cracks, and have new bolts installed. Pistons will need to be checked for pin play, damage to the bottom of the skirts hitting the cylinder walls. Clearance and trueness of the bores in the block.
Where the edelbrock heads in stock form? There should be no valve contact with a cam under .575" total lift unless machine work. The other issue could be the valve springs are not the correct ones for the camshaft. It is real easy to not have the correct spring pressures, open and closed. High rpm could have the valves floating and hitting the pistons. If you have the stock springs from edelbrock, and a high rpm range of 6,500 a smacking is very possible. Like others have said, rebuild, repair, and make sure the valve train is up to the rpm range you want to run. You will need new valve springs if you are changing the camshaft any way. Much camshaft companies will give you a listing of what pressures to use for the valve springs in the closed and open postions. Check coil bind too. You can run as small as .060" but this IMO is too tight. I run .090" min. Good luck. Rick L.