Ticking sound coming from vertical cylinder, possible valve issue?

[Speeddog]

Likely there's some damaged parts, so prepare for that.

[SterbenSoup]

What should I keep an eye out for as far as parts that could be damaged?

[koko64]

Ok, so I'm not very good for the names for everything but I'll do my best.

The timing jumped because somehow the hole that held the key that held the "cam gear"? in place was bored out, so the key would literally just fall out.  Obviously this was a big problem. 

May have been a cheap fix but instead of getting a new cam shaft I used JB weld to hold the key in place, and so far the timing is fine.  I ended up getting new belts because I didn't know how many miles were on the ones I had, since I got the bike at 20k, who knows what the last guy did.

Oh dear, that changes everything. You're in good hands with Speeddog.

[DarkMonster620]

I have had that noise on a few bikes(including mine)  when they've been standing for a long time and belts were replaced . . Only once I had a bent valve . . .

If noise doesn't go away after a heat cycle then it would be advisable to take the heads off

[SterbenSoup]

So here's where I'm at, got it to top dead center and the timing on the vertical cylinder is indeed off by a good bit, here's a couple pics of everything, if I'm doing this right.  With this being the case, barring anything too terribly broken, I just need to correct the timing?

[Speeddog]

With the layshaft pulley in the position shown in your pic, remove the vertical belt, and see if you can rotate the vertical pulley a full turn by hand.

I strongly suspect that you've got some bent valves.

[SterbenSoup]

So the valves are bent and there is some beautiful scarring on the piston, I went ahead and took the head off to check after trying to rotate the vertical pulley.

Suggestions?  I've been looking into replacement valves and pistons and they are far from cheap, would I be better off trying to find a replacement engine?