I'll just throw this out there but if the noise gets worse when warm would it generally point to exhaust rather than internal? I've had a few cars that ticked when you start them and they got quieter as they warmed up and I'm sure they were internal problems. Any black soot visible around the manifold you haven't touched?

 

I hate seeing posts where there is no resolution or where the troubleshooting just stops so I'm posting a quick update of my progress so far although I haven't found the noise yet.

Yesterday I adjusted the valves with the car running, no noticeable difference after I finished adjusting them. The only thing I noticed was if I tightened down on the rocker arm nut too quick the engine would stumble a bit, I assume this is due to changing the tolerances in the lifter too quick? I'm not worried about it but thought I would mention it.

I have been all over the engine with a stethoscope and I can't really nail down where the noise is. The noises do travel weirdly around the engine block. I have eliminated the water pump and timing chain, there is absolutely no abnormal noise coming from them. The lower down on the block I get the quieter any noises get so that confirms it somewhere up top. The noise just sounds like its coming from under the intake somewhere!

My next plan is to run the engine with the valve covers off and tighten down on each rocker arm one at a time (but not too much!) to see if that either eliminates the noise or makes it worse. If nothing occurs then I can safely say its not the lifters and probably not valve train related. I will also check one more time for exhaust leaks using a sort of smoke test that has worked for me in the past, I will add sea foam in through a vacuum hose and let it soak for while and then when i start her up if I have an exhaust leak I should see some smoke coming out.
If I can't find this noise I'm just gonna run it till it explodes or I pull the motor for some other reason, which ever comes first!

Thanks for all the suggestions so far, even if I don't acknowledge them I have noted them!

 

Before I checked the rocker arms etc like I mentioned in the above post I decided to double check myself by pulling off the spark plug wires 1 at at time again. Well what do you know I think I found the problem! Not enthused with what I found but at least I have found it. The noise decreased substantially when I pulled the wire off the #3 cylinder indicating a fault somewhere in there. Now I just have to decide how to proceed from here....

 

Glad you found it, sux that you have to dig into it but... definitely a wrist pin/piston slap or a rod bearing..(although the sound seems too high pitched to be a rod knock to me but...). The engine definitely has a misfire in it as well.. Either way, time to tear it down and build it better. Let the upgrades begins.

 

I'm glad I finally found it too, although not glad at the same time if you know what I mean!

I dropped the oil pan and took a look at the piston and this is what I found, definitely some piston slap as the skirt does not look in very good shape. #1 and #2 had some wear as well but not nearly as bad, and the other cylinders looked in good shape. Any idea what causes this?

 

I definitely have the same ticking noise. I found a leak around the donut on the passenger side. My question. What is the size of the donut? I have a 396 in a 1963 corvette.