Simple check for valve tap: Remove oil fill cap (while the engine is running). If you hear the same tapping but louder, it is valve tap. If not louder, then it is something else.
(this only works on the one side of the engine that has the oil fill cap.)
Another idea: I saw you are new to I/O's. Are you familiar with the sounds that U-joints make on an I/O? Generally they are quiet when the engine is trimmed down, and make some noise when trimmed up high enough to trailer. A little noise when trimmed 1/2 way up is OK. The engine should not be started when the drive is trimmed all the way up. Does the noise go away when trimmed down? If so, then you do not have a problem.
To find internal engine noises, a mechanic's Stethoscope could be helpful:
http://www.sears.com/kd-tools-mechanics-stethoscope/p-00999911000P?sid=IDx01192011x000001&kpid=00999911000&kispla=00999911000P
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"Knot Easy" 2000 Horizon 240 Volvo 5.7GS /SX
tow: 2017 Honda PILOT EXL-AWD
prev. boats:
'87 Chaparral 198CXL 4.3 OMC Cobra
'69 Jetstar 16ft Ski Boat, 115hp Yamaha
'68 Aluminum Jon Boat, 3hp Sears
'64 Water Wings