engine trouble

[MB250se111]

anyone know anything about rebuilding a 129.980 engine ('67 250se)! I have this squeek that sounds like it's coming from somewhere in the block. At first I thought maybe it was just the cam not getting sufficient oil but I inspected the oil line and watched oil flow out of the openings while I turned the engine (with coil disconnected). The noise is sort of loud, metallic and choppy. What I don't understand is that after the engine is fired up it purrs and makes no worrisome noises--I've let it idle for up to 30 minutes, occasionally reving it. Once I start driving, however, it starts to make that infernal noise in less than 100 feet, and quickly progresses to being so loud you can hear me coming form a block away. If I then pull over and let it idle again, the noise substantially decreses but does not completely go away; but if I turn it off and then restart it, it's quiet again. Does any one have any idea what it could be? How difficult is it to rebuild the short block? Can I just swap in a 130.980 engine from a '68 280se? A chevy conversion? Help!