It sounds like the lifter might be colapsed.
Remove the distributor ( after you mark positions on it ) and put an
oil pump driver in and run the
oil pressure up.
Then, put the distributor back in and see if the rocker arm goes up and down.
Make sure the distributor is in time.
If the valve train is adjustable, you will need to run the engine and loosen the rocker arms one at a time and adjust the lifter for top travel. This will give you best RPMs.
Just my $0.02
