Can I use guids / uuids as counters for key derivation? I have a 512 bit master key, and 128 bit unique identifiers.  I'm going to derive 256 bit keys to for use with deterministic and block ciphers.

For reference, The KDF I'm going to use is Hash( C | Z).     

The implementation will be SHA256( uuid | master key).  

I don't particularly care if SHA256 generates collisions as I never intend to store the derived key.  

It think this will be fine, but would love a second opinion.
Yes, in practice this will be fine.

Expert cryptographers will give you grief and tell you that you should be using a PRF, and technically speaking, they will be right.  So, if you want to spare yourself from having that conversation, replace SHA256 with a PRF, such as AES-CMAC or SHA256-HMAC or PBKDF2 (using the master key as the key and the uuid as the seed).  This is the technically proper way to do it, and I'm thoroughly sympathetic with those who argue you should do it this way.

That said, even if you went ahead and used your original proposal (SHA256), you'd almost certainly be fine.  So, if I saw you using SHA256 instead of a PRF, I wouldn't get too worried about it.

P.S. I see a lot of confusion in the comments.  The following are not identical: PRF, MAC, HMAC.