Here was my post about the
same thing. I do feel your pain eventhough the car was not mine to begin with. That "something" was likely a piece of guide rail broke off and caught between the chain and cam gear. There is very little clearance between the chain and valve cover so when the rail get caught in between, the chain raised and rubbed against the valve cover and broke it off. It also messed up the timing and in the process bent the valves. The heads have to come off to exam the damage.
http://www.peachparts.com/shopforum/showthread.php?t=112321