Re: Tapping noise from valve and side cover
The pushrod could have been bent by an over rev condition, or adjusted too tight. The only hope here is the valve didn't float and possibly strike the piston.
Best thing to do is hand crank the engine over with the cover off and look at the lifters. See if they all are moving the same. A bad lobe on the cam will not allow that one lifter to raise the same as the others. Also check the conditions of all the pushrods by rolling them on a piece of glass. If one is bent due to an over rev, then you just might find more. If all looks fine, replace the pushrod and adjust the valvetrain by the book. After doing this, run a compression check to see the health of the cylinder. Doing a compression check before replacing it will not yield an accurate reading.
And as stated before, this certainly will cause a bad idle.
Edit: Just seen Bond-o's post about the rusted valves. Never thought of that, but sounds reasonable. Easy to check with a different rod installed. Turn the engine over by hand and see if it might hang up when that valve is actuated.