Ok, so here's the latest update.
I ran a compression test and it looks like cylinders 1, 2, and 3 are at around 200-210 Psi and cylinder #4 kept giving strange results. The most consistent was 180psi but we got 150, 130, and even a 90 and a 30. I think it had something to do with the threading where the spark plug goes possibly, I went and got the compression gauge adapter stuck in there after the first check and maybe some stuff got in there or something when I was trying to get it out. It seemed like the more I tightened the gauge hose the higher the compression read.
Aside from the strange readings from #4, the compression looks really awesome. (My odometer stopped at 159,000 sometime before I bought the car.)
I slapped on a new oil pan gasket, filled it up with oil, threw in some new spark plugs and nice shiny new wires I found at the junkyard on one of the m42's there and got her running for the first time in a while. After leveling out, she had that same rattle, however, all of a sudden the rattle disappeared at idle. Now the rattle is only present when I rev but disappears again after around 3-4000 rpms. This is very interesting indeed. I'm not too sure what this means.
When I opened up the valve cover before, I forgot to check the arrows on the cam gears to see how many teeth it may or may not have jumped. At the junkyard, I found 2 brand new cam gears in the trunk of the 91' with the m42.

I wonder if it is possible to readjust the timing and replace the cam gears without completely removing the chain...
So it looks like I'm just going to be replacing parts in the timing case and hopefully that solves the issue here. I got my girlfriend to get a video of the rattle so I'll include that here.
http://www.youtube.com/watch?v=7knc2n9APlkagain, this noise stopped at idle and now can only be heard when it revs