Can anyone tell me what I should see looking down the MDS hole?

I pulled a month old one out since I thought it was possibly defective but when I looking down the hole I see what looks like a small piece of the bottom of the hole missing - like a piece of pie taken out.

I have been getting the P1416 code both before and after new lifters and camshaft and this makes me think the oil is spilling out the missing piece and is not able to activate the lifter.

Does this make sense?

Is the block toast?

 

View down the MDS hole of the one for cylinder #6
Here is a photo down the hole showing the missing piece.

Any ideas what to do about this?