Not so sure about chain.
If it is, listen to it when it idles and listen out for the noise of a chain. It will be very distinct noise. If you can hear it then there is slack. If not - may not be chain. A tight chain should be almost silent. (or at least drowned out).
If its tappets, i always thought that it didn't go "knock" as so much as "tap".
Sounds more like something more serious has gone. But if you have the time it won't cost much to find out.
Regards,
Tinman
