Quote Originally Posted by Madd Maxx View Post
As I understand this system, there are two solenoids in the manifold for each deactivated cylinder. There are also two separate oil passages to each lifter. One solenoid controls the the lifter pin movement, and the other provides oil for lash adjustment. One passage provides oil to move the pin and the other provides oil to take up the lash when the inner lifter cylinder stops moving.

It sounds like you might have a problem with the pin activation solenoids. They may be energizing at the wrong time and deactivating the cylinders. If the lash adjustment solenoid is not activating at the same time, you would have the condition you describe.

Just a thought.
+1 Doesn't sound purely mechanical, it would be knocking from startup till 20 seconds. Sounds to me like something is commanding the oil out of the lifters after 20 seconds.