Barry, you're onto something with the tensioner.

Before priming the tensioner it had much less tension and there was no noise.

After priming the tensioner it had much more tension and that's when the noise started.

Today I uninstalled the tensioner and slowly did a little hand cranking... no noise.

I put the tensioner back in and screwed it almost all the way into the block. The noise was significantly reduced.

It sounds like it's coming from somewhere in the timing cover, near the low end if I had to guess.

I thought tension was set automatically, is there something I was supposed to do to set the tension? It looks like there is a bolt on the end of the tensioner on the outside, perhaps that needs to be backed out?

I did a little forum searching and haven't found anything yet.

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1987 300SDL 167k
1992 Volvo 740 140k
1990 Volvo 740 250k
1989 Volvo 240 269k

Anyone want to trade an old Volvo for an '87 300sdl?