Sounds more like a dead chain tensioner and a badly stretched chain - they will run on the vavle cover if the oil gets low enough (don't ask how I know, but if anyone EVER claims "they didn't hear anything" when the car ran out of oil and locked up, they are lying!).

Peter

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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!