The
valve lifter, or
hydraulic lifter (although it's operation is purely mechanical), or even
camshaft follower, is basically a little cup that sits atop the valve, with a
shim of varying thicknesses on top of it that acts as a spacer for the cam's lobe to ride on.
Normally the
lifter itself does'nt "collapse", instead, the
shim becomes worn and needs to be replaced with a new one of proper thickness, which is determined with a
feeler gauge and some
plasti-guage.
It is also common for a
spring to have "collapsed" or broken, but your problem is probally just that the
shims need to be adjusted, a "scheduled maintenance" item suggested to be performed every 60,000 mis.,
or every 2 yrs., whichever comes first, which will definitely cause a "loud knocking" at the top of your engine.
Just a little clarification to avoid confusion, so ask your "mechanic...friend" about this and let's know what he comes up with.