hi, i was just pulling apart my 1986 302 out of my old grand marquis (finally) and my suspicion was correct- i have the factory hydraulic roller lifters- thats the good news.
the bad news is that the engine is so carboned up im amazed it ran as well as it did, and it also explains the crappy mileage (around 8 in town). more bad news after i got the valve covers off... every rocker arm was loose- im amazed it didnt clack more than it did (again explains the crappy mileage) so now its aluminum headed 347 time
i havent pulled the heads off yet so i dont know how good the cylinder bores are, so i dont know if i can get by with a .020 overbore or if i have to go .030 or .040. ill probably pull the heads off tomorrow. im still debating wether to go straight e-85 or just premium gas... but that debate is for another time. now for a couple questions: arent lifters supposed to slide in and out of their bores easily like in my 460? i had to use vice-grips and wiggle them out of the 302. if they are supposed to slide easily how do i correct that? do i have to have the lifter bores machined? my lifters are pretty scuffed up so ill be getting new ones.
other question: im looking at afr 185s, lunati 61010 cam, scat 347 assembly, headers, true dual exhaust with crossover, crane roller rockers, and already have edelbrock 600 cfm carb and performer 289 intake. think i could get 300 horse flywheel out of that combo? my friend broke my win98 cd and my win98 computer crashed, so im using linux right now, otherwise id just run it on my desktop dyno.

 

I have it at work, but not at home. I'm prestty sure the 300 rwhp is quite possible with that set-up. More I would think.

The lifters should move freely. You should be able to use a wheel cylinder hone in a drill to clean up the bores.