Worn camshaft lobe caused this on my 89 230TE. With less movement than there should be the hydraulic lifter pumped up at high revs until the valve hit the piston, hence the noise. Loss of power at that speed was caused by the valve not closing.
The 4 cylinder fuel pump relay is worth checking out as this would cause the power loss, but not the noise.
'08 Chrysler 300CRD (MB OM 642 engine)
'95 E220 estate
'89 230TE (R.I.P.)