I suspect you're right about the hydraulic tappets Garth but before decapitating the engine, try adding 0.5L of Carlube ATF-U to the engine oil and drive as normal, at least until the next oil/filter change. At that point, substitute 1L of ATF-U for engine oil then top up with your normal engine oil.
You should start to notice some sort of difference after a few hundred miles though, improved economy, smoother running, lack of clatter on start up etc.
You may still have a failed hydraulic tappet or a burned valve but IMHO worth trying the simple fix first.
