How did you determine the lifters are okay?

I experienced a collapsed lifter during warranty on my erstwhile '84 190E 2.3. I knew immediately what it was, but the dealer did the work.

With the valve covers off and the EZL disconnected, crank the engine, and it will crank faster if you remove the spark plugs. You should be able to spot a collasped lifter by eyeballing valve lifts as the engine cranks.

I would describe a collapsed lifter as more of a loud ticking sound rather than a knock.

Duke