just whip the head off its an hour or so job....as we all know...

i would be suprised if its done a piston unless it was pinkin like a fooker but then surely you would hear this?

my first s2 did this almost exactly the same and it turned out to be the turbo shagged and the head gasket fooked proper!! the tapping was water in the oil making the lifters tap like hell,

good luck mate!