Doesn't sound right. Burned valves will sound like an air compressor, and aren't common on today's engines. Collapsed lifters / low oil level make a clattering noise all the time, regardless of engine speed or transmission in or out of gear.
I think I'd recommend a second opinion from a reputable transmission shop.
Caradiodoc
Wednesday, January 13th, 2010 AT 8:44 PM