Front edge of head gasket is leaking, probably needs to have the two small hex head bolts inside the chain case tightened up. Otherwise, I'd live with it (unless you cannot have oil drips) since replacement requires removing the head.
The M110 is a noisey engine -- mechanical tappets. An adjust will possibly quiet it down, but there is a distinct possibility that it will always make some tappet noise.
1972 220D ?? miles
1988 300E 200,012
1987 300D Turbo killed 9/25/07, 275,000 miles
1985 Volvo 740 GLE Turobodiesel 218,000
1972 280 SE 4.5 165, 000 - It runs!