Yes, liquid metal is not good on copper or aluminum.  The stock nickel plated IHS won't do that, but a plain copper (or a stock IHS lapped down to copper) IHS will react like that in the presence of liquid metal (gallium).  If the other side of the IHS is also bare copper, it will be similarly pitted and that IHS should be removed and replaced.  You could lap the top smooth again and use something other than liquid metal, but if the bottom side is messed up, it's probably not worth your time trying to level that side out.
 
I hate to link to LinusTechTips, but whatever.
Warning about using Liquid metal from Thermal Grizzly - Custom Loop and Exotic Cooling - Linus Tech Tips

The thing is they told u that the Liquid metal is not safe to use on Aluminum but it's actually more than that.U shouldn't use it on bare copper too because it makes a reaction with the cooper and the copper absorbs it.. When the gallium contacts pure copper, the metals irreversibly alloy.This reaction proceeds until there is no more copper or all the gallium is consumed..
The reaction is: Ga + Cu → CuGa2 [67%] + Cu3Ga [11%]. ( + Ga2O3 [12%])
That means liquid metal will literally eat into the copper until the gallium is gone, and the resulting copper-gallium alloy is a silver-ish color. Yes, - in case you are wondering - the gallium in liquid metal reacts this way despite the fact that there are other metal stabilizers present in Liquid Metal.

As stated in the quote above, liquid metal is basically useless on copper, because not only does the copper get messed up, but it also absorbs the gallium which makes the liquid metal stop working properly as well.
 
Do you still have the stock IHS somewhere?  If so, put that back on instead.  Or, buy a IHS which is nickel plated.

Surprisingly the inner surface is still smooth, it's discolored, but it's still uniform. Though I pretreated it with LM for 20-30 minutes letting the copper to absorb some of the LM before securing it to the CPU.
 
I don't have the original IHS, but if I did, the gap between the die and the inner IHS is too big, it would require more than LM alone to create perfect heat transfer. By default Intel uses a relatively thick layer of indium to close the gap, LM would spill out as no surface tension would keep it in place.

austin86
It would not amaze me if there was something other then just copper in the ISH IHS, something like aluminum.

 
What I was thinking too.
 

strange....maybe not 100% copper