Definitely sounded like a collapsed lifter...
 

Just went through the engine a couple months ago. Wife came back from town and it definitely sounded like a mechanical banging on the passenger side. Pulled the valve covers off, had her crank it over and everything working like it should. WTH. Then I discovered my stainless steel manifold bolts that I didn't put lock washers under, had come loose. Replaced the gasket, and used those star-shaped lock washers. I'm still amazed how it sounded so much like mechanical banging, metal on metal. Definitely unique to the LS engine....

Sound like this?:

You Tube

Sounded similar but worse. Probably because I found all my manifold bolts and backed out.

Pretty good problem to have tho. The rest of us usually can’t get those bolts out!😂

Oh yeah, I thought for sure I had a defective lifter in there. Or a lifter that rotated sideways, destroying the cam and sending metal bits everywhere. Was a relief to find the exhaust bolts loose! Lol, never been so happy to have to replace manifold gasket.

What year is your H2?

2003
Went through the engine/transmission last year. Transfer case and both differentials. Going to be my main retirement vehicle.... I have about 5 years to get it in like new condition. I'm in a rural area that gets snow every winter, and no salt on the roads around here. 114,000 original miles on it right now. Only thing left to do is the brakes, but holding off as they're about 70%. Everything works perfect, and my wife said she prefers driving it over her Escalade, LOL.
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I just went through my engine in my 2009 and replaced what was needed and cleaned everything up like new. I put in a bigger cam and some valvetrain stuff to work with it. This is my wife and my retirement vehicle as well and I’m still fixing things too. I replaced the lifters but I’ve built LS engines before so I knew the lifters can still be full of manufacturing junk so I disassembled each one, cleaned and put back together first. Important step to do. Hopefully your problem clears up with some oil changes. Funny, we just sold our ESV because we decided to get the H2 to replace it. Wife loves it, Her all time favorite car!
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I used blue tape too.