Before you lose heart, I think I should share my thought process:

When I first heard the noise in the video, I thought "Ooo. I've heard that one before... bad injector." Then I read about the compression test, and thought "Yuck. Done. That alleged injector problem sounds deeper than the noise I know."

OK... I've now had time to mull and to listen again. I still say "Done" IF you've checked everything and the compression didn't come back up... but listen to this video of an injector problem with the camera under the truck:

 

That does sound very similar to the noise I have. What kind of injector problem did that turn out to be?

When I get some time, I do plan on rechecking torque on everything and doing another compression test. Also I need to run it again and unplug the injectors on the drivers side while running. I unplugged each injector on the passenger side and the noise never went away.

 

I would probably just drive it until it dies. I wouldn't take it on a road trip.

 

That video was early in my ownership of the truck, so I didn't have the opportunity to send the stick in to have a rebuilder do the forensics on the injector. Swapping the stick out cured the noise. Mine was almost the opposite of your symptoms - it wouldn't make the noise until the oil was good and warm, then only under load (in gear).

A window in the block is not in preference to swapping a good block out for a core. There is also the aggravation factor to consider: It would absolutely drive me spinning-head-and-vomiting crazy to drive with that banging and miss pulse. Additionally... with a planned motor swap, you get the home-field advantage. Just ask a Seahawk how that feels.

 

My machinest ear says #5 has a cracked piston. Why you say? The numbers were down for starters. Secondly the blow by your getting it should not be that much nor should it be cloudy. Then add that with a clunking noise on every rotation and that sounds like a cracked piston of some sort. Maybe even skirt and ring combo. That is where I would put my money 20:1

But you can move that injector to another hole to verify it first. If you move the injector and the noise stays in #5 you know it is not the injectors fault. That would be my next move it doesnt cost you much but your time.

 

Thanks for the input hotrodfeguy. I'll try that along with some other things I've yet to try when I find some time. This is my busiest time of year between work and trying to get the farming done for the end of the year, so this is kind of on the back burner for the next week unfortunately.

The funny thing is, is that I've pretty much accepted the fact that the motor is toast, and I'm kind of looking forward to a 7.3 build. I'm normally the guy that doesn't heed the warning about fixing things that aren't broken, so when things actually do break I've normally already planned what I would do to fix and enhance it.