I finally had some time:
The loud knocking sound was indeed the valve clearance. However, I'm in a bit more of a jam. The reason they were loose was because the intake camshaft melted, and unfortunately, so did the seats they sit in...
I did not know there was a difference between camshafts, but when I aligned timing to the 2T mark, I noticed (now) that the cam lobes did not match the image in the valve adjustment procedure. At 2t, instead of pointing up, they were pointing down. When I rebuilt the engine, I switched the exhaust and intake camshafts. Oddly enough, it still ran smooth at first...
Some pics I took:
http://imgur.com/a/jjICu
What I don't get is what could have caused this? Problems with oil passages? The fact that I switched the camshafts?
How do I fix this? Looks like I'll have to get a
new top end?
Thanks for your help guys.