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The noise only happens under a load (in gear) If you take it up to 2500-3000 rpm in neutral rev it is smooth as silk. The oil is crystal clear, didnt even harm the exhaust baffles but the dealer seems to think it overheated enough to warp a connecting rod,
I'm not a motor head, but if it's a physical defect from the overheat such as what the dealer suggests, shouldn't the noise be heard wether the engine is under load or not, aren;t the rod still pushin'?
Just a thought, did you check the gearlube in the outdrive? Could they have forgotten to refill it? I've seen stupid stuff happen all the time!
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Jvalich
http://www.badcock.com'04 FW 288 Vista "Mental Floss"