Toyota Repair: 5s-fe tapping noise - part 2, tappet noise, top overhaul

Question
I took it for a top overhaul.  The items worked were on the valves and lifters, trottle body, injectors...and changed all gaskets and/or oil seals, o-rings.  Basically, they overhaul everything EXCEPT the area of pistons, cylinder heads etc (the lower portion of the engine).

The tapping is very apparent when cold  but when hot, the tapping is audible if and only if you put your ears.  When the conditioner is switched on, there is a loud hollow sound coming from the mid portion of the engine, i.e. between the cylinder and the gear camshafts on the top.


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The text above is a follow-up to ...

-----Question-----
Ok, they found that the tappet/lifters was the issue rather than the silent gear on the camshaft.  However, after various adjustments, they tapping sound persists - now at the whole top of the engine block especially when engine is cold.  

On top of the tappet noise, when the air-conditioner is turn on, from a distance it sounds like a diesel engine or much noiser than before - clattering inside the engine block.

What they did previously was they changed/serviced the following items:

Changed-
4 inlet valves lifter
4 exhaust valves lifter
3 exhaust vales
1 valve key????

Serviced-
Adjust (grinding) shim valves and valves

I believe the damage was done when they adjusted those values and lifters (those that were not replaced).  any other areas of concern that I should get the mech to look at?


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Part 1
Question
Sent car for top overhaul.  Changed distributor.

After overhaul, the car sounds like a diesel engine.  A tapping noise is coming from from the engine block, next to the timing belt.  THe mech changed the tappets and exhaust valves during the overhaul.  The mech is at a loss.  He is now talking about camshafts or cylinder being off.

What is the problem?

Answer
This engine uses a "silent gear" design for the camshafts, one of the camshafts has a two piece gear that is spring loaded, before disassembing a service bolt has to be installed into the two piece gear to keep the spring from unwinding, if the bolt is not installed and the camshaft gear loses the preload on the gear the engine will sound just like you said, a diesel. If this is the case the camshaft has to be removed and and preloaded by turning the smaller part of the gear until the hole in the gear lines up with the threads in the main gear and inserting a short 6mm thread size bolt, once the camshaft is reinstalled the service bolt is removed.  

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I am beginning to think that whoever you are dealing with has no idea what they are doing, it's not that hard to find an obvious engine noise and they didn't find the cause, if they did the noise would be gone, but it's not. You also said that you took it in for an overhaul, can you tell me exactly what this overhaul consisted of? An engine overhaul would include replacing the rod and main bearings and replacing all the piston rings and all gaskets and the valve grind and may I ask, was this noise there before you took it in to have it overhauled, if you could clear that up for me it would help.

Answer
It's starting to sound like this may be a piston noise which is typically louder when the engine is cold, if I couls listen to this noise I would have an answer for you in a few minutes, this is why I think you need to find someone more competent who knows how to diagnose engine noises, you probably want to avoid going to the dealer but it may become necessary if they can't find the problem.