Loud noise that disappears at high rpm.

[Rhino]

I have a loud noise in my engine. IT sounds like a diesel. It is quite discerning. I rebuilt the head and then the sound came. It goes away when i rev the engine above 3500 rpm.

Rhino

[bmwman91]

That sounds a lot like the dreaded dying timing chain assembly. When you rebuilt the head, what all did you replace on the timing chain side? I would be damn careful right now. If it is the timing chain slapping around, you are likely to lose roller bearing pieces...and they commonly end up in the oil pump, blowing the timing case to pieces (ask me how I know). A few here have fallen victim to this.

Check the chain tensioner, and pull the lower oil pan after replacing things as needed for any debris.

[Rhino]

The previous owner told me he replaced the chain recently so i didnt bother changing any of it. the guides from the top looked to be fine.

[peerless]

Was the chain guide the original stamped steel piece?

Looks something like this when they finally explode. This is caused by excessive chain slap. Note the teeth marks in the square piece, this is where it rolled between the crank gear and chain. This quickly bends all the valves.

http://img.photobucket.com/albums/v176/peerless/Ernest%20M42/DSCN0286.jpg

http://img.photobucket.com/albums/v176/peerless/Ernest%20M42/DSCN0292.jpg

Tear it apart now and save the engine or let it fail and rebuild the entire engine, which given all the failure points of these M42's is not a bad idea.