FWIW-We haven't run the engine since discovering the loose chain.

After listing all this out, I'm thinking that we're seeing the results of a combination of things:
1) Failed chain tensioner or associated parts not applying correct tension to timing chain.

2) Loose timing chain causing erratic valve timing at idle (engine did smooth out above 1000RPM) - cam timing possibly off one tooth.

3) Bad/failed harmonic balancer - indexing dowels missing/sheared, balancer has rotated and is giving incorrect degree reading (actually no reading is possible) at the pointer.

Comments?

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