I may be able to put up a video but last time I tried to get a video you couldn't hear it over the other noises.

There is a fairly loud mechanical click that increases with engine rpm. It doesn't click at all at idle but as soon as you bump the throttle you can hear it. It is most pronounced when the engine is cold. I bought a mechanics stethoscope and had someone blip the throttle while I probed around the engine but found nowhere on the engine that I could really hear it. If I listened to the block I couldn't really tell it was there at all. Seems like it is in the head somewhere. I did a valve lash adjustment, timing belt, spark timing, and seafoamed fairly recently. The spark timing was really off - it was retarded maybe an inch on the camshaft. I put it back to TDC and the click seems like it is louder. I should also mention that I smell exhaust fumes coming from the engine bay if I have the window rolled down at a stop. I also had a bunch of smoke coming from behind the engine when I seafoamed.

But, I'm getting over 40mpg with the spark timing at TDC. Thoughts/suggestions?

 

Check your lash settings again. Just in case.

 

Yeah, agreed with Honda4speed... sounds like a valve issue. The rocker arm assembly
and most valve trains have the the tendency to make the click noise. Some amount of
noise is normal at cold going away at hot. But with the hood closed it shouldn't be a major rukus.