Here is my advice.

IF your engine is getting ready to take a dump on you.
Which it could possibly be, considering its history.
I would suggest that you find a used LONG block assembly and valvetrain.
These are very commonly available on the internet in the $2k area.

Do not waste time or money trying to fix an engine that has already been hurt once.

As far as whats going on internally.
Well, thumper mentioned a dropped piston cooling nozzle.
That is a good possibility.
But, there are other things that can be considered.

--Justin

 

You said that correctly. Your hammer sounds like mine was. I just went through a night mare with mine and did not fix the cause. Mine was number one cylinder. I did a good job fixing the result, bored the cyliner, replaced the piston with new, checked the new ring gaps in the new bore, microed all parts, put it together and it did it all over in less than one thousand miles. All my cooler jets were in place, crank was perfect.

Locate the cylinder that is bad, pull the head, if the cylinder wall is bad, pull the engine. There is no other way. Look at it this way, if it is hammering, either the piston, or wrist pin, or the crank is bad, pull the engine, and either replace or rebuild properly, no inframe. I will not know why untill the engine is out and torn down. Probably the oil cooler jet is plugged on the bad cylinder. Now I get to do it all over again, don't do what I did.